February 20, 2012
The deal marks Banyan Tree’s seventh investment in India and the first in the current year.’
Bhopal-based infrastructure firm Dilip Buildcon Ltd (DBL) has raised an undisclosed amount from Banyan Tree Growth Capital LLC for a minority stake, according to a company statement. Under the deal, Banyan Tree will also have a Board representation in Dilip Buildcon.
DBL is promoted by Dilip Suryavanshi, who has been engaged in the construction business since late 1980s. Currently, the company focuses on engineering, procurement and construction (EPC) work for road and bridges segment alone. Earlier, DBL used to carry out construction work for Madhya Pradesh Public Works Department and slowly graduated to bigger contracts in the range of Rs 50-100 crore. The firm now employs more than 400 people.
The deal marks Banyan Tree’s seventh investment in India and the first in the current year. Its existing portfolio includes Axiom Cordages, Trimax IT Infrastructure Systems, GEI Industrial Systems, Deepak Fasteners and Dee Development Engineers.
The road sector has been increasingly attracting the attention of private equity players. India may require $1.7 trillion in the decade starting from 2010, to meet its infrastructure demand and keep pace with the economic growth and urbanisation, according to a report by Goldman Sachs. Of this, power and roads alone may require upwards of $700 billion.
In January 2011, private equity major 3i India invested around $61 million (Rs 302 crore) for a minority stake in SIBHPL, a portfolio of BOT (build, operate and transfer) road projects of Supreme Infrastructure India Ltd (SIIL), a mid-size EPC contractor.
In the same year, Norwest Venture Partners and Xander Group invested Rs 400 crore in Sadbhav Infrastructure Project, which had a portfolio of nine concession-based projects. Nandi Infrastructure Corridor Enterprises Ltd (NICE), which is developing the 164 km tollway between Bangalore and Mysore, was also in deal talks with players like JPMorgan and Goldman Sachs. Private equity major Actis also formed a $200 million joint venture with Tata Realty & Infrastructure to develop roads and highways last year.