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Indian investors go overseas to shop for infra projects
Though the Indian infrastructure sector might not be drawing investors owing to the government's policy paralysis, among other factors, infrastructure advisory groups feel Indian companies could look at foreign avenues.
CRISIL Infrastructure Advisory, for instance, is pitching for investors to take part in the $750-million (about Rs 4,425 crore) Dau Giay-Phan Thiet Expressway project, a Vietnamese public-private partnership (PPP) project seeking requests for qualifications.
"The project has viability gap funding and long-term funding from the World Bank that shall be on-lent to the project by the government of Vietnam," said Pratyush Prashant, senior director of CRISIL Infrastructure Advisory.
He is confident Indian investors who held back domestic investments would see value in this project.
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Indian investors go overseas to shop for infra projects
Prashant believes this is an opportunity for investors who aren't getting enough avenues in India.
"This investment is for the medium to long-term, as the money would flow in between 2015 and 2019. There are a lot of cash-rich groups in India," he said.
The firm is planning to raise as much as 8 per cent of the project cost, about $65 million (about Rs 383 crore), in equity from investors.
"We are targeting funds, private equity investors, developers and construction companies looking for engineering, procurement and construction orders, who do not mind putting equity into a project," said Kamran Khan, programme director of the World Bank's Global Infrastructure Finance Centre of Excellence. The entity is also looking for investors in Hong Kong and Singapore.
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Indian investors go overseas to shop for infra projects
As Indian infrastructure players have experience in public private partnerships, experts feel they could gain by investing in new opportunities abroad.
"There are a lot of companies from countries such as Mexico, Korea and China, which invest abroad. It is more about the asset class than the geography," said Khan.
Investing in east Asia, Khan believes, would help Indian companies diversify risks. "Investing all the money into a country for long periods of time is not a good idea. Besides, east Asia and India move in different cycles," he said.
Vietnam, which recently started inviting tenders for PPP projects, would have more opportunities for Indians to avail of.
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Indian investors go overseas to shop for infra projects
The country is expected to bring in more highways under the PPP mode and look at other infrastructure projects such as ports, airports and projects in the electricity sector. "But these opportunities might be a few years away," said Prashant.
CRISIL advisory is not limiting itself to bringing Vietnamese projects to India. It is also looking for investors for a 40-Mw hydro power project in the Philippines, as well as transportation and port projects in Africa.
"There is money in the Indian market," said Prashant.
The rupee's depreciation wouldn't stop Indian companies going for international projects, which could be expensive. "Rapid forex devaluation is a short-term trend, not a long-term one. We are looking at investments over a three-five year timeline," said Prashant.
