IDFC Private Equity invests in Indian water company

IDFC Private Equity is investing 350 million Indian rupees to fuel the growth of a local family-run water management company.

IDFC Private Equity is investing Rs350 million ($9 million; €6 million) for an equity stake in Doshion, a family-run water management company in India. Founded in 1978 by its chairman Dhirajlal Doshi, the company is managed by his sons and headed by Ashit Doshi.

Doshion has collaborated with international companies and has been engaged in water purification, waste water and effluent treatment projects. IDFC’s investment is expected to fuel the company’s growth by acquiring niche companies in design and fabrication of water treatment plants and by bidding for water projects.

Prakash Karnik, managing director of investments at IDFC said Doshion is the private equity fund’s first investment in water management, an emerging sector. “We believe that this is a potentially high growth sector and an important part of the overall growth of the economy in general and infrastructure in particular.”

Ashit Doshi said Doshion hopes to become a “significant player in urban and rural water supply and treatment as well as waste water treatment, which are slowly opening up for private participation.”

IDFC Private Equity is investing from its 2006 $430 million fund and is planning to start fundraising for a third private equity fund before year end.  Prior to this deal, IDFC led a $100 million investment in a photovoltaic business belonging to Moser Baer, India’s largest optical storage media manufacturer.