IDFC and Khazanah launch Indian roads JV

The Indian developer and the investment arm of the Malaysian government have agreed to form a jointly held infrastructure development company with a focus on India’s roads sector.

Infrastructure Development Finance Company (IDFC), the Indian financial services firm focused on infrastructure, has set up a dedicated infrastructure development company with Khazanah, the investment holding arm of the Malaysian government.

Khazanah will hold 80.1 percent and IDFC 19.9 percent of the equity share capital in the new company, which will focus on opportunities in India’s roads sector.

The first investment from the joint venture will be in Jetpur Somnath Tollways Limited (JSTL), which is developing a project involving the four-laning of the Jetpur to Somnath section of the National Highway 8D in the state of Gujarat. The investment is subject to regulatory approvals and permissions, including from the National Highway Authority of India.

Khazanah is a significant shareholder in IDFC. In July last year, it invested just over $179 million in IDFC alongside emerging markets investor Actis in an institutional placing. According to reports, this maintained Khazanah’s stake in IDFC at just under 9 percent. At the time, a 17 percent stake in IDFC was held by the Indian Ministry of Finance, its largest shareholder.