SMS Infrastructure Ltd. and IDFC announced today that IDFC has purchased 48.4% equity in one of its SPV viz. SMS Shivnath Infrastructure Limited (SSIL). SSIL owns, operates and maintains an 18.4 kms 2-lane road on National Highway 6 which serves as a bypass to the city of Durg in Chattisgarh. The concession was awarded in 1997 by NHAI under a BOT format, and extends until 2031. The project is amongst the first concessions awarded by the National Highway Authority of India (NHAI).
Speaking on the occasion, Mr. Anand Sancheti, Managing Director of SSIL, said that “participation by IDFC, a leading financial institution in the infrastructure sector, in the equity of a Group company, reconfirms our business philosophy of creating enduring value in our businesses. This investment also marks the starting of a partnership approach, which would foster aggressive growth in the years to come in the chosen fields of road, waste management and power which the Group has embarked upon.
Dr. Rajiv Lall, MD & CEO of IDFC remarked “Our investment in SSIL is part of an important initiative to set up a new infrastructure fund to invest in the equity of operating and greenfield assets. SSIL will be one of the seed assets for this fund. IDFC will work with companies like SMS Infrastructure Ltd. to help in the creation and operation of infrastructure assets.”
Mr. M. K.Sinha, President & CEO of IDFC Project Equity Company Limited, remarked “The investment in SSIL is part of our build up of seed assets for the India Infrastructure Fund. We look forward to working with the SMS Group in building quality infrastructure assets in India.”
About SMS Group: The SMS Group, apart from having substantial interests in the road sector, is also involved in the execution of turnkey projects for the railways. It has in the past been involved in the carrying out various works awarded to it through national and international competitive bidding. It is also the tolling agency in a number of road projects. The Group has also been awarded a concession for setting up and operating two industrial waste management plants, small Hydroelectric Power Plants and Uranium mining. It plans to expand further in order to establish a well diversified project portfolio in power, railways, road transport, mining and environmental services such as waste management.
About IDFC: IDFC’s mission is to be the financier and advisor of choice for infrastructure in India. IDFC is positioned as a special financial institution which is focused on project finance and investment banking activities in infrastructure. Going forward, IDFC will focus on establishing stable fee revenues from innovative infrastructure initiatives in financial markets, asset management, project development and advisory along with growing its balance sheet at a significant pace.
In its nine years in the infrastructure business, IDFC’s interactions with project sponsors, policy makers, regulatory bodies, market intermediaries and other institutions have established its credentials as a significant player. As on September 30, 2007, IDFC’s balance sheet size was Rs. 22,442 crore. In the past 2 years, IDFC has contributed to the financing of 3600 MW of additional power generating capacity. In roads and ports, IDFC has helped finance about 1000 kms of new roads and 3.5 mn tu of additional port capacity. IDFC’s domain knowledge in the infrastructure space and the rigour of its due-diligence processes are well recognized in the market.
In addition, IDFC Private Equity, a 100% subsidiary of IDFC, manages the largest infrastructure focused private equity fund in the country with a corpus of Rs. 2,744 crore. (Press Release)