The Blackstone Group has invested $150 million in Nagarjuna Construction Company, the third largest construction company in India.
Founded in 1978 by AVS Raju and currently led by his son, A Ranga Raju, NCC owns several infrastructure assets through subsidiaries on a build-operate-transfer basis. Its construction services business operates in the road, water, buildings, electrical works and irrigation segments, and the Company recently expanded into the power, oil and gas, and metals segments. The Company is listed in India on the Bombay Stock Exchange under the ticker symbol NAGARCON and on the National Stock Exchange under the ticker symbol NAGARCONST.
The investment, made through a fresh issue of shares and convertible warrants, was made through Blackstone’s BGP V fund and will give Blackstone representation on the Board of NCC. Raju said in a statement that the investment would allow the company to make additional investments in public-private infrastructure projects as well as to expand their capital base in order to bid for larger projects in the future.
Blackstone made its first investment in Indian infrastructure earlier this year when it teamed with Citigroup and India’s Infrastructure Development Finance Company to form a $5 billion (€6.5 billion) fund for infrastructure investment.
In that deal, Citigroup and Blackstone initially committed $250 million to the fund and said they plan to raise the remainder from Indian and foreign investors. State-owned India Infrastructure is also expected to contribute to that fund. The Nagarjuna investment, however, did not come from this fund.
Earlier this month 3i Group launched a $1 billion (€740 million) fund to invest in the Indian infrastructure market through their own partnership with the India Infrastructure Finance Company.