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US Pension funds & PE players bet on Indian Highways

Created by : Rashmi Patil, Financial services  | 09 19 2009 08:49:59 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Keywords : indian private equity pe highways highway construction pe players us pension funds
Activity:  252 views;  last activity : 07 06 2010 20:18:09 +0000

On a four-nation (London, New York, Singapore and Zurich) roadshow to hardsell the India infrastructure story, roads and highways minister Kamal Nath has expressed his confidence that the overseas investors including US pension funds were keen to invest $10 billion over the next three years a report from Bloomberg suggested, it is said that buyout funds may finance road building and pension funds may look at the post construction phase.  
 
A recent Global Economics Paper by Goldman Sachs projects Indian’s infrastructure funding needs over the decade at $1.7 trillion.   Now, the plan is to set up expressways of nearly 18,000 km, mega projects of more than $1 billion and upgrade over 6,000 km.  Also the World Bank has come forward to provide a $3-billion loan for highway development.

What do you think guys will this Roads as an asset class provides a steady return for Investors? Would like to know your views.

  
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I think this is a great opportunity for Indian infrastructure, and its good news that investments are happening in India, and we are seeing investments in different avenues like Highway construction and that to world market is interested in Indian infrastructure, and also India is having a vast network of highways given its radius, it will do good for investors in this asset class amd it appears that the private sector is more than happy to lap up the opportunity. And the road programme offers an attractive opportunity for both equity and debt investors. According to me this is an asset-class that provides a very steady and stable return to investors.
By Rashmi Patil, Financial services  09 19 2009 08:49:59 +0000
 
Top Argument
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The Indian railways Now is running for the masses of India. With US investors coming in They would start pressing for returns , turn the Railways into race for making returns for the investors and the become a burden for the common man

We dont want a situation wherein we are forced to bend and bow to the investors at common mans cost.

As it is railways are making profit .let the so called investors invest in BEML and the likes and take the returns!!!

WHY Railways???
By Charles davison, Project Manager, Douglas OHI LLC  09 19 2009 09:54:12 +0000
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0

Government should invest money in construction of Roads and solar panels capable of using road and double as power generation units it could serve a great purpose.. We should use a little bit of sunshine to solve or power losses and have roads which can double up as solar panels for power generation. But only problem is, this whole process will take a lot of time and money...
By Pragya Kothari, Construction-Heavy, DLF  | 10 06 2009 06:11:59 +0000
1
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It is but its takes time slow and steady

hi this is nagaraj
By Nagaraj , Engineer- Operations, Tecumseh Products India  | 10 05 2009 12:40:23 +0000
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yep we should have road and vehicle which use this roads and if we could adopt the solar panels which could be used as road and double as power generation units it could serve a great purpose.

it is said it cost the same kind of money to build the both the things.road panels.

i guess we could use the ample sun shine that we have to solve our power problems and have roads which can double up as solar panels for  power generation.

it makes a great economic sense.
By sandesh saboo, Research Associate/Analyst, saboo associates  | 10 03 2009 10:34:37 +0000
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Indian infrastructure provides for PE firms to come in.  PE firms are facing tough competition and dwindling returns in their traditional markets (US and Europe) and therefore are looking for alternative investment markets, and emerging markets. But the cash flows and the returns are a point to note. India has more risk into infrastructure as an asset class. The tightening of credit in infrastructure financing as a result of the liquidity squeeze in credit markets generally makes it more difficult to put infrastructure deals together.
By Amita Shanbag, Chartered Accountant/CPA, S Ravi  | 09 20 2009 13:04:07 +0000
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Interesting to see that our cabinet minister Kamalnath has joined the contest of making money out of investment. Road Infrastructure is considered
as basic support for Industries & indian transport sector. The roads can fetch returns only when tolls are levied at points amidst.
Kamalnath has made the infrastructure projects a Commodity -fetching returns, which should have promoted considering fuel for growth of Industries and Transport sector. 
 NHAI has also started the concept of 'Public Private Partnership'(PPP) and 'Build operate and transfer'(BOT) quite a few years ago.
Investors setting up the plant in India look infrastructure as basic need for their growth. It will also levy indirect burden in the form of 
toll tax to Industries, and the Industries will pass on the burden to consumers. So in a way the investors of Infrastructure projects fetch 
their returns from pockets of Indian Consumers. 
As it is an initiative of Indian Roads & Highways minister, they must have done some calculation in the back end as to how these projects will give returns.
Generally 'PPP' and 'BOT' models fetch good returns. So these projects should also help investors earn handsome return up on maturity.

Interesting to see that our cabinet minister Kamalnath has joined the contest of making money out of investment. Road Infrastructure is considered as basic support for Industries & Indian transport sector. The roads can fetch returns only when tolls are levied at points amidst.

Kamalnath has made the infrastructure projects a Commodity -fetching returns, which should have promoted considering fuel for growth of Industries and Transport sector. NHAI has also started the concept of 'Public Private Partnership'(PPP) and 'Build operate and transfer'(BOT) quite a few years ago.

Investors setting up the plant in India look infrastructure as basic need for their growth. It will also levy indirect burden in the form of toll tax to Industries/Transporters, and the Industries will pass on the burden to consumers. So in a way the investors of Infrastructure projects fetch  their returns from pockets of Indian Consumers. 

As it is an initiative of Indian Roads & Highways minister, they must have done some calculation in the back end as to how these projects will give returns. 'PPP' and 'BOT' models fetch good returns. So these projects should also help investors earn handsome return up on maturity.
By pranav patwardhan, Territory Officer-Direct Sales, Hindustan Petroleum  | 09 19 2009 17:12:10 +0000
1
0

It will be good news if no extra cost is levied on our poor transporter & road users,ours is a middle class economy,toll rates as per there standard would be very heavy which has to be tackled. Best example of our own Bangalore out ring road project a small toll charged have created so many problem for the ruling govt.
By Sunil Katariya, Accounts Manager, Rajesh Katariya & Co  | 09 19 2009 10:09:23 +0000
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