Temasek to invest $200m in GMR Energy

Singapore’s Temasek Holdings is investing up to $200 million for an undisclosed stake in GMR Energy, an Indian power generation, transmission and distribution company. The investment, made by Temasek’s wholly-owned subsidiary Claymore Investments, will be made in the form of convertible securities of the company. 

GMR Energy is a subsidiary of GMR Infrastructure, a Bangalore-based infrastructure major with interests in airports, energy, highways and urban infrastructure. It has thirteen power projects of which three are operational and 10 are in various stages of implementation. It also has nine road projects, of which six are operational and the rest are under development. 

The company plans to enhance its installed power generation capacity from 808MW to more than 6,500MW in the next three to four years, it said in a statement. 

“The energy sector within the infrastructure space is an attractive long-term investment area. India may have historically lagged behind in adding new generation capacity, we believe that enabling regulations and private sector participation will allow the sector to add substantially to India’s GDP growth rate,” Manish Kejriwal, head of Temasek Holdings India, said in a statement.

GMR is the only private sector player in India with ownership interests in two large Indian airports, namely the international airports at Hyderabad and New Delhi. The company has also built and operates a new terminal at Istanbul’s Sabiha Gokcen International Airport in Turkey.

IDFC Private Equity, an India-focused private equity infrastructure firm, was an earlier investor in GMR Energy. The firm subsequently swapped its stake in the energy subsidiary into that of GMR Infrastructure prior to the parent’s listing in 2006 and has exited that investment. The firm separately invested in Delhi International Airport, but in May 2009, it completed another share swap deal with the parent company which saw the firm part with its stake in the airport. 

A few of Temasek’s investments in India include ICICI Bank, Mahindra & Mahindra, Tata Teleservices, Bharti Infratel, Punj Lloyd and Matrix Laboratories. In India, the firm has offices in Mumbai and Chennai.

Temasek is an active private equity investor via commitments to private equity funds and direct investments. It has committed to funds managed by the likes of The Carlyle Group, FountainVest, MBK Partners, Hopu Investment Management, New Horizon Capital, FountainVest Partners and CITIC Capital, according to data provider PE Connect. 

Established in 1974, Temasek Holdings manages a portfolio of S$172 billion (€90.7 billion; $124 billion) as of 31 July 2009.