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Singapore's GIC buys 49% stake in India infrastructure trust for 44 billion rupees

By Asia Asset Management  
Aug 9, 2019

Singapore's sovereign wealth fund GIC Pte Ltd is investing, via affiliates, 44 billion rupees (US$621 million) for a 49% stake in a private infrastructure investment trust focusing on highway assets in India.

IRB Infrastructure Developers Ltd will own the balance 51% and transfer nine existing highway concessions to the trust, the Mumbai-based highway construction company says in a presentation posted on its website.

It says the investment from the GIC affiliates will be used to reduce the debt load of the concessions, and fund the construction of ongoing highway projects parked in the unnamed trust. The highways have an average concession period of more than 20 years.

The affiliates were not named and spokespersons for GIC did not immediately respond to questions from Asia Asset Management.

IRB says the joint venture trust will "explore future opportunities in the road sector in India”.

"GIC affiliates will have standard and customary rights of a financial investor, including corresponding board representation," the Indian company says in the August 6 presentation.

The Singapore investment symbolises the "confidence shown by a global institutional investor in IRB's ability to build quality infrastructure for India", according to the company’s Chairman and Managing Director Virendra Mhaiskar.

"We are delighted to have GIC as our long-term investor in this growth story," he says in the presentation.

GIC has been actively investing in various sectors in India in recent years, including retail, real estate, and hotels.

Most recently, the wealth fund teamed up with The Indian Hotels Company Ltd in June to jointly invest up to $600 million in luxury and upscale hotels in the country.

A year ago, GIC said it had acquired a "significant minority stake" in property developer Provenance Land, which introduced the Four Seasons brand into India, for an undisclosed sum.

GIC does not publicly disclose its assets data. According to the Sovereign Wealth Centre, the fund had $510 billion of assets under management as of end-March 2019.