Tata Realty & Infrastructure, a Tata Group company formed specially for the roads and highways sector, is forming a joint venture with private equity firm Actis that could invest about $2 billion (Rs8,900 crore) over five years in building roads, a focus area of the government.
The unlisted Tata Realty will own 65 per cent of the joint venture called TRIL Roads Pvt Ltd, while Actis will own the rest, The Economic Times reported today quoting Tata Realty managing director and chief executive officer Sanjay Ubale.
Actis, which manages a $750-million (Rs3,333 crore) infrastructure fund, is planning to invest at least 30 per cent of this in India over the next three years, he said.
Tata Realty will invest $122.5 million (Rs544 crore) in the JV from internal accruals. The company has equity of Rs900 crore and real estate assets of Rs600 crore, said Ubale.
Italy's biggest toll operator Atlantia, which is a technical partner of Tata Realty, has agreed to invest $200 million to pick up a stake in special purpose vehicles to be floated for setting up the projects, said Ubale.
The combined $400-million investment planned by Tata Realty, Actis and Atlantia will help them attract at least $300 million as 'viability funding' from the government. The remaining $1.3 billion, of the planned $2-billion investment, will be borrowed from financial institutions.
The Tata-led joint venture intends to build at least five road projects with a minimum length of 500 km each in the next few years.
Actis was spun off from the Commonwealth Development Corp six years ago. In the past 10 years, it has raised $7.3 billion and invested $4.8 billion in businesses in emerging markets. It invests in infrastructure in Africa, Latin America and South and South East Asia with a focus on power, roads, ports and airports.