A recent report highlighted that the global pension funds and sovereign wealth funds may invest up to $50 billion in India’s infrastructure sector over the period of the next five years. This will give a tremendous boost to the Indian infrastructure sector, which has already grabbed a few major deals from various sovereign wealth and pension funds so far.
Canada Pension Plan Investment Board and L&T IDPL, Bharti Infratel – CPPIB has been investing in India since 2010 and has already committed INR 2000 crores (USD 298 Million) and INR 2000 crores (USD 298 Million) in L&T Infrastructure Development Projects and Bharti Infratel respectively. It has even formed a strategic alliance with the Shapoorji Pallonji Group to acquire stabilized office buildings in the major metropolitan cities of India.
PSP Investments – Reliance Infra Power Distribution - PSP Investments, the second Canadian pension fund after CPPIB to expand its roots in India, took a 49 % stake worth INR 3500 crore (USD 522 Million) in Reliance Infra Power Distribution in November 2015. A year later, it claimed ownership of four Indian toll roads totaling 710km as part of a global transaction with Spanish infrastructure company Grupo Isolux Corsan in a deal worth INR 15000 Cr (USD 2.2 Billion).
APG Asset Management – Retail Assets - The Dutch fund marked its foray into the Indian infrastructure space in 2012 with investment in the hotel chain Lemon Tree. A few months later, it entered into a joint venture with Godrej Properties to construct residential apartments. In November 2016, it made INR 2600 crores (USD 450 million) investment in retail assets, with the investment firm The Xander Group as the co-investor. Together, they have purchased three shopping centres across India for USD 300 million. They will use the balance USD150 million to buy or construct new retail real estate assets and lifestyle destinations in top-tier cities.
Caisse de Dépôt et Placement du Québec (CDPQ) – Renewable Assets - CDPQ, the second-largest pension fund in Canada (after CPPIB) made the Indian infrastructure sector do a happy dance when it announced in March 2016 that it will invest more than INR1000 crore (USD 150 Million) in the renewable assets such as hydro, solar and geothermal power. In October 2016, CDPQ made another breakthrough deal by entering into a long-term partnership with Edelweiss Financial Service Ltd to invest INR 5000 crores (USD 746 Million) in stressed assets and specialized corporate credit in India.Close on the heels of this announcement, CDPQ shook hands with Tata Power International Pte. Ltd, ICICI Venture, Kuwait Investment Authority (KIA) and State General Reserve Fund (SGRF) of the Sultanate of Oman, to facilitate investment in the India power projects with an initial capital of up to USD 850 million. CDPQ, which has C$270.7 billion ($199 billion) in net assets, says it plans to invest in India’s solar sector with Azure Power, a New York-listed firm with about 1 GW of solar capacity under various stages of development. Since infrastructure and power generation sectors are highly interdependent, such a vast infusion of funds will reduce the dependency on bank credit and help allocate resources judiciously.
Brookfield Asset Management Inc - Canada’s largest alternative asset manager has plans to invest $2 billion over the next two to three years. It has already announced a joint venture worth Rs7000 crores with State Bank of India (SBI) to purchase distressed assets. Before that, it acquired AIG Global’s real estate in India, Unitech Corporate Park, six roads & three power projects from Gammon Infrastructure Projects, office & real estate assets from Hiranandani Developers (Rs6700 crores) and a majority stake in R Com telecom power company (Rs11,000 crores). It has also invested $20 million in Kotak Mahindra Bank’s Infrastructure Fund.
Macquarie Group, Sydney - In a big boost to government’s asset monetization programme, Sydney-headquartered Macquarie group won the Toll Operate Transfer (TOT) bid of nine national highways with a total length of just under 700 km. The company won the bid by offering INR 9,681 crore (USD 1.44 Billion) The government is targeting USD 1 billion of funds from the second tranche of auction which could go even higher given the current trend. The government expects to raise around INR 2 lakh crore (USD 30 Billion) through TOT in the next five years.