IFCI Venture backs Indian gas distributor

Sabarmati Gas is reportedly selling a 50 percent stake to a consortium of investors including the New Delhi-based financial consultancy, UTI India Infrastructure Development Seed Asset and IDFC Project Equity.

IFCI Venture Capital Funds, a subsidiary of the Industrial Finance Corporation of India, has invested an undisclosed sum for a 17 percent stake in Sabarmati Gas, a Gujarat-based gas distribution network.

UTI India Infrastructure Development Seed Asset, a division of the Unit Trust of India, and IDFC Project Equity, a subsidiary of India’s Infrastructure Development Finance Company, are each acquiring a 17 percent stake in the company as well, according to the Economic Times. The Unit Trust of India and IDFC Project Equity did not reply to requests for comment at press time.

Sabarmati Gas is selling an approximately 50 percent stake for a total deal size of INR800 million ($16 million; €12 million) to a consortium of investors, the Indian daily said.

Sabarmatic Gas is a joint venture between oil and gas exploration company Gujarat State Petroleum Corporation and Bharat Petroleum. The company is creating city gas distribution infrastructure and compressed natural gas outlets in the Gujarat districts of Gandhinagar, Mehsana and Sabarkantha.

IFCI made the investment out of its €60 million India Automotive Component Manufacturers Private Equity Fund 1. Sabarmati Gas is the fund’s first investment in the gas distribution space, Rajeev Mukhija, deputy manager of IFCI, said in an interview.

The fund’s other investments include Carnation, a multi-brand auto sales and services business, and Marck BioSciences a drug manufacturer. The fund primarily targets Indian automotive component companies and is approximately 50 percent invested, Mukhija added.

A month earlier, IDFC Project Equity invested INR3.5 billion into Essar Power, an Indian power plant operator.