3i gets 49% of four roads in Indian infra deal

Supreme Infrastructure India’s Vikram Sharma said 3i India Infrastructure Fund paid $61m for a stake in four build-operate-transfer road projects. He said the roads portfolio could be floated on the stock exchange in four to five years’ time.

In an interview with India’s CNBC-TV18 television channel, Vikram Sharma, managing director of Indian developer Supreme Infrastructure India, shed some light on the deal his company struck with the 3i India Infrastructure Fund.

Yesterday, Supreme announced that the $1.2 billion infrastructure fund had paid $61 million for a minority stake in a portfolio of build-operate-transfer (BOT) road projects, without disclosing further details. But in an evening interview, Sharma said the $61 million bought 3i a 49 percent stake in a portfolio of four road projects.

Without naming names, he added that 3i beat competition from two other investors for the stake. Sharma also shed some light on 3i’s exit strategy for the roads portfolio, saying that Supreme had an option to buy back the roads from 3i in four-and-a-half to five years’ time, or, alternatively, the portfolio could be floated via an initial public offer.

Supreme, founded in 1983, has built over 400 kilometres of highways across India, although it also targets power, water, railway and civil construction projects, the company said in a statement.

3i raised its debut India infrastructure fund in 2008, focusing on investments of between $50 million and $200 million in power, ports, roads and airports, according to 3i’s website. It has invested in the likes of listed power firm Adani Power and roads business KMC Roads, to name just two of its investments.

With Fund I close to being fully invested, 3i is currently in the market for a second Indian infrastructure fund, which is targeting $1.5 billion. But whereas Fund I focused mainly on economic infrastructure, Fund II will look at other areas like water supplies, water treatment plants and infrastructure for the education and healthcare sectors, sources told Infrastructure Investor late last year.