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Thursday, April 8, 2010

SEW Infra raises Rs152 cr from JBC fund

Hyderabad-based, SEW Infrastructure Ltd, an engineering, procurement and construction (EPC) services company, on Monday raised Rs 152 crores from Delhi-based private equity firm Jacob Ballas Capital India Pvt Ltd (JBC). The investment was made from the firm’s third fund - the $440 million NYLIM (New York Life International) Jacob Ballas India Fund III, Llc.

SEW has a special focus on the irrigation and hydropower segments, while now it is slowly diversifying into becoming an infrastructure developer. Sunil Chawla, partner, JBC, who joined the board of the SEW told Mint, “ They have bagged a few concessions to start hydro power projects of their own, so a part of the investment will go into meeting this capital expenditure need.”

SEW has bagged concessions for setting up 5 hydro power projects on build, operate & transfer (BOT) basis, in the state of Arunachal Pradesh, aggregating 564 MW. In addition, the company has minority stakes in 2 hydro power projects in the state of Sikkim, with a total capacity of 186 MW.

“While there are many EPC players in the market SEW is definitely among the top 5 players in the hydro power and irrigation segment,” added Chawla. He declined to comment on the stake purchased though he said it’s a minority stake transaction. Last year (2008 - 2009) the company made Rs 1600 crores in revenue. he added.

V Rajasekhar, managing director, SEW said in the press statement that the infusion of funds will also help the company strengthen its balance sheet further enabling it to bid for larger projects. He could not be reached for further comments.Citi Venture Capital International (CVCI) had invested Rs100 crores in the company in 2007.

In the past Jacob Ballas has backed many infrastructure companies like Bharti Airtel Ltd, Pipavav Shipyard Ltd, Reliance Infrastructure Ltd, ABG Shipyard Ltd, Sarvana Global Energy Ltd.

Arun Natarajan, chief executive, Venture Intelligence, a Chennai-based research service, says, “Since October 2009 to now, there have been 10 transactions worth $217 million in the engineering services space. Within engineering services anything to do with water like treatment of waste water or desalination of water or hydro power, has got high priority with investors.Daiwa Capital Markets acted as advisors to SEW on this transaction.

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