SAIF in talks to buy 11% stake in PTC India unit

SAIF Partners is one of a few investors in talks with PTC India to acquire a minority interest in the power trading company’s financial services arm.

PTC India, formerly known as the Power Trading Corporation of India, is looking to sell an 11 percent stake in its unlisted subsidiary PTC India Financial Services. The company is in talks with a few investors including SAIF Partners, an Asian growth and venture capital firm.

PTC India Financial Services, which currently counts Goldman Sachs Strategic Investments and Macquarie among its backers, may sell shares to private investors, through a public sale of shares or both, Tantra Narayan Thakur, chairman of PTC India, told Bloomberg.

“We are in talks with a few investors including SAIF about selling a stake, but we haven’t finalised anything yet,” Thakur told Bloomberg.

SAIF declined to comment. PTC India could not be reached by press time.

PTC India Financial Services is a special purpose vehicle (SPV) of PTC India and commenced business in May 2007. The company provides financial services in the energy value chain. It makes investments in power projects, fuel sources, related infrastructure such as gas pipelines, LNG terminals, ports and equipment manufacturers. It also provides short term and long term financing to project companies and utilities.

PTC India has a 77.6 percent stake in the company, while Goldman Sachs and Macquarie India Holdings own stakes of 11.2 percent in the company each as of 30 September 2009, according to PTC’s website.

PTC and UK-based emerging markets specialist Ashmore Investment Management are currently targeting commitments of $750 million for a joint venture fund that aims to provide equity for energy projects across the power generation, transmission, distribution and fuel extraction and transport sectors in India. The fund has seed capital of at least INR5 billion ($107 million; €72 million), which resulted from an issue by PTC India in May 2009 on the Mumbai stock exchange.

Late last month, SAIF Partners set up a $100 million fund in partnership with its portfolio company One97 Communications to invest in India’s mobile service industry. In the same month, SAIF and Peepul Capital sold a collective 62.9 stake in Indian IT company Intelligroup to Japan’s NTT Data for $199 million.

SAIF, which is focused on investments in India, Greater China and Korea, is currently in the market for its fourth fund, for which it had raised approximately $1.25 billion by March this year, according to sources. The firm was targeting $1.2 billion for the fund, a source told PEI Asia earlier in the year.