Axis Private Equity, the private equity arm of Axis Bank, has invested 750 million Indian rupees ($17.5 million; €11 million) in Neesa Leisure, a hotel company. It also bacled Corrtech International, a provider of oil and gas infrastructure services with an investment of 670 million Indian rupees.
Neesa Leisure owns three properties under the ‘Cambay’ brand. It develops and operates hotels and is looking to have eight properties in the next five years around western India. It also plans to increase the number of rooms it offers, to about 1,000. The company specialises in providing services for meetings, conventions and events.
Alok Gupta, managing director and chief executive officer of Axis Private Equity, said in a statement that “there is huge demand-supply gap” in the hospitality sector in India. “There are close to 110,000 hotel rooms across all categories in India, a very low figure when compared to other countries like China which has over a million rooms and USA, which has over four million. It is estimated that India needs another 125,000 rooms by 2010 to meet the surging demand.”
Corrtech International provides corrosion protection services, lays oil and gas pipelines and builds city gas distribution networks. Axis said that the estimates market size in the sectors Corrtech operates is about $56 billion. The capital infusion will be used to purchase equipment for scaling up the company’s operations and enabling it to handle larger pipeline projects, the firm said.
The investments have been made out of the $500 million Axis Infrastructure Fund, which saw a first close on $150 million in April. The stakes taken in the two companies were not revealed.
The fund makes investments in infrastructure and infrastructure-enabling companies in various sectors including transportation, hospitality, railways, oil and gas pipelines, and water supply.
Last month, Axis invested $30 million in Harish Chandra India, a manufacturer of railway tracks, highways, bridges and dams.