Deals

Frontline Strategy invests in infrastructure enabler

Mauritius-based Frontline Strategy has made its maiden investment from the India Industrial Growth Fund in Shriram SEPL Composites, a pipe manufacturer.

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Frontline Strategy, an India-focused private equity fund manager, has invested an undisclosed amount to acquire a 26 percent stake in Shriram SEPL Composites, a producer of water and sewage pipes, and oil and gas pipelines.

Shriram SEPL Composites is a newly-formed joint venture between Shriram EPC, which provides engineering, procurement, construction and project management services for renewable energy projects, metallurgical plants, and municipal projects; and Strategic Engineering, a manufacturer of composite glass fibre reinforced pipes.

The joint venture company manufactures fibre-reinforced plastic pipes, an alternative to traditional steel and concrete pipes. The pipes are used for water and sewage, and for on-the-ground oil and gas pipelines. The joint venture is an attempt to integrate Shriram EPC’s client network and project management competencies with Strategic Engineering’s technology.

The investment will be used to increase pipe manufacturing capacity and to expand the company’s product offering, according to T Shivaraman, managing director and chief executive of Shriram EPC.

Atim Kabra, managing partner at Frontline Strategy, said in a statement: “Shriram SEPL combines Shriram EPC's proven capability in industrial projects with SEPL's technology expertise to serve India's fast-growing infrastructure development sector, with its large demand for pipes for sewage and water lines.”

The investment was made out of the India Industrial Growth Fund, a $200 million (€126 million) fund that invests between $10 million and $12 million per deal in small and medium enterprises in India with revenues between INR 200 million ($4.65 million; €2.94 million) and INR 1 billion.

Established in 2000, Frontline Strategy’s anchor investor is the Fabiani Family Investment Office which belongs to Madrid-based Indian Harish Fabiani. Some of Frontline’s transactions from its previous fund include Titagarh Wagons, a private manufacturer of railway wagons; Alfa Transformers, a manufacturer of power, furnace and distribution transformers; specialty pharmaceutical manufacturer Shilpa Medicare; and CBay Systems & Services, a provider of KPO services for the healthcare industry.