Blackstone will invest $600 m in next 60 days

Akhil Gupta

This news story first appeared in DNA Money on Thursday, January 13, 2011.

Global private equity giant The Blackstone Group plans to invest close to $600 million in India in the next 60 days or so.

The firm is understood to be in advanced stages of discussions with potential companies and hopes to close a few big-ticket deals this fiscal.

Blackstone has invested around $1.3 billion across 12 deals in India since setting up shop in 2005, Akhil Gupta, chairman and managing director, Blackstone Advisors India Pvt Ltd, said at an event recently.

“From the deal pipeline being looked at, we should be closing this fiscal at $1.8-1.9 billion in terms of overall investments in India till date. Power sector is an interesting story gaining momentum and we are currently evaluating two companies for a possible placement. If everything goes well, we should end up making investment in both or at least one for sure,” Gupta said.

Asked how much the firm was likely to invest in the power sector companies, Gupta said, “The deals could be anywhere in the $100-150 million range.”

He, however, refrained from divulging the names of the likely recipients.

DNA had earlier reported that Mahindra & Mahindra has finalised plans to launch solar power generation business and is understood to be in discussions with private equity players for a possible placement.

Blackstone may be looking to invest in a Kolkata-based power producer Visa Power Ltd, a newspaper recently reported, quoting sources.

This, however, could not be independently confirmed.

According to Gupta, starting this week, Blackstone will start making investments from its $15 billion BCP IV fund.

He did not specify how much of the said corpus will get invested in the Indian market, though.

Blackstone has so far made two investments in the Indian power sector. In July last year, it acquired a 12.5% stake in Monnet Power Co Ltd (MPCL) for Rs275 crore.

An arm of Monnet Ispat & Energy Ltd, MPCL is setting up a 1,050 mw coal-fired power plant at a cost of around Rs5,100 crore, to be funded through a mix of equity and debt.

It followed this up with a $300 million (Rs 1,350 crore) investment in Moser Baer Projects Pvt Ltd, picking up a significant majority stake.

The New Delhi-based company is into development of power generation facilities, with assets in thermal, solar and hydroelectric power and plans to commission 5,000 mw by 2016, comprising 4,000 mw of thermal, 500 mw of solar and 500 mw of hydro capacity.

In fact, a recent Reuters report quoted top Moser Baer Projects officials on the company’s plan to raise over $100 million next fiscal to fund solar power projects.

The private equity fund has in the past pursued three themes for investing in India —- domestic demand, infrastructure, labour and talent arbitrage. Among the labour and talent arbitrage investments have been Gokaldas Exports and Intelenet Global, while the infrastructure investments include Nagarjuna Construction, Allcargo, Machine Tools and Gateway Rail. On the domestic demand front, the portfolio includes Emcure Pharmaceuticals, Nuziveedu Seeds and Jagran Media.