2 April 2018: The Ajay Piramal-led Piramal Group, which has set up platforms to acquire operating renewable energy and roads assets, has roped in Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPPIB) as an anchor investor, said two people aware of the development.
In July 2018, Piramal Group chairman Ajay Piramal had said in an interview that the group aims to set up an aggregation-cum-investment platform for renewable energy and road assets.
The proposed platforms for roads and renewable energy assets will see a total commitment of close to $2 billion, according to one of the persons mentioned above.
“They (Piramal) have tied up commitments from CPPIB and another large European institutional investor. They will also bring on board two or three more investors,” he said, seeking anonymity as he is not authorized to speak with the media.
Piramal plans to deploy around $1 billion in acquiring solar and wind assets under the renewable platform, while it would invest $800 million to $1 billion under the roads platform, said the second person mentioned above, also requesting anonymity.
Piramal has already started scouting for assets that can be acquired under the two platforms, he added.
Both Piramal Group and CPPIB said they cannot comment on Mint’s queries as they do not respond to “market rumours and speculation”.
The infrastructure-focused platforms add to the existing tie-ups that Piramal has ventured into to tap opportunities in areas such as real estate and stressed assets.
In February 2017, Piramal Enterprises had entered into a strategic partnership with Ivanhoé Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec (CDPQ), Canada’s second-largest pension fund, to provide long-term equity capital to top residential developers across five Indian cities.
In 2016, it had also set up a distressed asset investment platform, along with private equity firm Bain Capital Credit, to invest in stressed assets.
The two entities will jointly invest about $1 billion in restructuring opportunities across India, along with the World Bank’s International Finance Corporation, which has also agreed to commit capital towards the fund.
In 2014, Piramal tied up with Dutch pension fund APG Asset Managementto invest $1 billion in Indian infrastructure companies through structured debt.
For CPPIB, this marks yet another investment commitment towards infrastructure in India. Last year, the Canadian pension fund manager invested $391 million in India’s largest renewable energy producer ReNew Power Ltd, across two tranches.
The Canadian investor has also invested in the roads sector in India. In May 2018, CPPIB and Allianz Capital Partners, part of insurance giant Allianz, invested in the first private infrastructure investment trust in India—IndInfravit Trust, sponsored by L&T Infrastructure Development Projects Ltd. CPPIB invested approximately Canadian $200 million for 30% of IndInfravit units.
Other major sovereign and pension investors in the Indian infrastructure space include sovereign wealth funds GIC Holdings Pte Ltd, Abu Dhabi Investment Authority (ADIA) and CDPQ.
Last year, GIC and ADIA invested $450 million in Greenko Energy Holdings in one of the largest funding rounds by an Indian clean energy producer. ADIA is also an investor in ReNew Power.