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Axis backs Indian rail-track maker

The India-focussed private equity firm has disclosed its first investment from the $500m infrastructure fund it is raising.

Axis Private Equity, the private equity arm of Axis bank, has invested $30 million (€19 million) in Harish Chandra India (HCIL), a manufacturer of railway lines. Axis acquired a stake of more than 25 percent in the company, a spokeswoman for the firm told PEO.

HCIL builds railway tracks, highways, bridges, dams and irrigation canals in India. The railway business is the most important of all the firm’s activities and provides 60 percent of the company’s revenues, while highways and irrigation projects each contribute 20 percent.

Alok Gupta, managing director and chairman of Axis Private Equity said in a statement that there is tremendous scope for infrastructure development in India and Axis is looking forward to partnering with HCIL and to scale up its business.

The statement said the Indian Railways has announced investments of about $12 billion in the next 5 to 10 years and it is a sign of the potential HCIL has to expand its operations in a variety of infrastructure development projects.

Axis’ investment was made from the $500 million infrastructure fund which it is currently raising. The fund had a first close on $150 million last month and is expected to garner the remaining $350 million by the end of the year.

The Axis Infrastructure Fund makes investments in infrastructure and infrastructure-enabling companies in segments such as transport, energy, oil and gas pipelines, urban infrastructure and development of hotels and resorts. The fund invests a minimum of $20 million in equity per transaction.

The firm has made four investments from this fund including its investment in HCIL. The other investments have not been disclosed yet and a company spokeswoman declined to comment on them.