SBI Macquarie to back Adhunik’s power arm

The infrastructure fund will buy a 12% stake in the Indian power developer for roughly $27m. It will be the second investor to buy into Adhunik, after IDFC Project Equity Fund.

SBI Macquarie Infrastructure Fund, a joint venture between Macquarie Capital, the State Bank of India (SBI) and the International Finance Corporation (IFC),  is acquiring a 12 percent stake in Adhunik Power and Natural Resources for INR 1.25 billion (€20.7 million; $27 million), a source with the knowledge of matter told Infrastructure Investor.

SBI Macquarie is the second investor to buy into Adhunik Power and Natural resources; the IDFC Project Equity Fund bought a 27 percent stake at INR 2.5 billion in December 2009. Adhunik Metaliks, of which Adhunik Power and Natural Resources is a subsidiary, will be left with a 61 percent stake in its power arm, following SBI Macquarie’s acquisition.

Media reports have suggested that Adhunik Power requires additional capital for setting up a 540-megawatt power plant at Jamshedpur in eastern India at a total project cost of INR 26.50 billion. The 18 month-long construction, expected to be commissioned in March 2011, is likely to be funded via debt and equity, with the debt-equity ratio being 3:1. The power generated will be sold on a merchant basis, which is attracting investment in the project, according to media reports.

Adhunik Metaliks, the flagship company of Adhunik Group of Industries, was formed in 2005 and is currently based in Jamshedpur. The group, which has manufacturing facilities in four Indian states, is also reportedly eyeing a $100 million deal for a 50 percent stake in an Australian coking coal mine to secure raw materials for its steel plants.