Morgan Stanley to buy stake in Indian arm of Isolux: report
29 Jan 2011
Morgan Stanley's Global Infrastructure Fund will invest $200 million for an equity stake in the Indian arm of closely-held Spanish construction major Isolux Corsan, according to a report in The Economic Times quoting people familiar with the negotiations. Executives at the Morgan fund and the company declined to comment.
Isolux India builds roads in north India. Gautam Bhandari, who also manages the fund's portfolios in the Middle-East and Africa, heads the India unit of the fund. The $4 billion fund was raised in May 2008.
This will be the second investment here by the fund. Last year, it teamed up with Goldman Sachs' infrastructure fund, General Atlantic, Norwest Venture Partners and Everstone Capital to invest $425 million in Asian Genco, a Singapore-headquartered firm which owns power plants in India.
Many large global funds, including Blackstone and Kohlberg Kravis Roberts, have announced multi-billion dollar funds for Indian infrastructure, though few have actually hit the road here. Last year, Tata Realty, a Tata Group firm, formed a joint venture with private equity firm Actis to invest in road projects.
Morgan Stanley shut its proprietary investment desk in India in 2008 after the long-famed investment bank was hit by the credit crisis. The investment management arm globally manages several billion dollars. The Isolux funding is one of the largest private equity investments in the road sector here. JPMorgan, Blackstone, 3I and Actis are among the largest investors in the sector.
In September 2007, Nagarjuna Construction Co received $150 million funding from Blackstone. JP Morgan's fund division invested $111 million in Nandi Infrastructure Corridor Enterprises in December 2010. Actis and 3I also made investments last year, investing $78 mil-lion each in TRIL Roads and Soma Highway Toll Projects.
Isolux Corsan operates in engineering, construction, manufacturing, concessions and property development. The company has presence in more than 32 countries, including Spain.