L&T to launch PE fund for power, road projects

Larsen & Toubro Ltd (L&T), the Mumbai-based engineering technology, and construction company, is planning to launch a private equity fund to invest in power and road projects in India. The fund size is expected to be in the range of $300 million (Rs1,330 crore), according to reliable reports. The company is likely to bring in a Singapore-based partner in this fund.

The move is part of the company's plan to tap the high growth investment segment, as infrastructure will remain a priority with the Indian government in the next few years.
The announcement also follows some big ticket investments made recently by global private equity giants in the infrastructure space in India. In one such investment in March this year, a Morgan Stanley-led consortium has put in $425 million (Rs1,885 crore) in Asian Genco Pte Ltd (AGPL), which has investments in Indian power generation assets and engineering services businesses.

In March, the government of India announced its plan to double its spending on building utilities, roads and ports to $1 trillion (around Rs 45,00,000 crore) in the 12th five year plan starting 2012-13. The government is expecting about 50 per cent of these investments to come from the private sector.

L&T is planning to invest the fund outside its group activities, a Bloomberg report adds quoting N Sivaraman, senior vice president for financial services. The fund will help L&T to support its activities in infrastructure space that are coming to its fold, including some highway projects in Mumbai. L&T is primarily engaged in the technology, engineering, construction and manufacturing space.