Abraaj Capital enters into India infrastructure

Abraaj Capital, through its Indian joint venture fund, has made its first investment in the country’s infrastructure sector alongside the private equity arm of India’s Infrastructure Leasing and Finance Services (IL&FS) group.

Abraaj Sabre, the joint venture of Dubai-based Abraaj Capital and Sabre Capital, an Indian manager, has entered into a $28 million transaction with IL&FS Investment Manager, the private equity arm of India’s IL&FS. 

The target of their investment is Ramky Infrastructure, which is part of an environmental and waste management organisation with the same namesake.

Sabre-Abraaj invested Rs 750 million ($17 million)and Infrastructure Leasing invested Rs 500 million in Ramky, according to The Economic Times of India, a daily. The deal was announced at a press conference in Hyderabad.

The transaction is first investment from Sabre-Abraaj India Private Equity Fund, an investment vehicle with a $300 million target scheduled to close in the near future.

Ramky Infrastructure constructs roads, highways, industrial buildings, irrigation canals, water supply and drainage systems. The company has invested in an industrial park and housing projects on a build-operate-transfer basis in partnership with the Indian government, according to a statement.

The new capital will enable Ramky to take on larger construction projects and make additional investments in other build-operate-transfer projects.

Abraaj’s investment in Ramky comes as the private equity firm advances toward an initial close on a $2 billion infrastructure and growth capital fund. The fund targets investments across Middle East, North Africa and South Asia.

Arif Naqvi, chief executive officer of Abraaj Capital said: “Some investors see the nations of the Middle East, North Africa and South Asia as separated by geography, demographics and economic fundamentals. We see something quite different: a single region linked by the promise of growth and opportunity.”