Axis PE has picked up over 25 per cent stake in the company and also two board memberships.
Axis has done the first closure of $150 million (Rs 630 crore) of its $500 million (Rs 2100 crore) infrastructure fund. The HCIL investment is the first such deal from the fund raising.
Axis is planning to raise the remaining $350 million soon under the name Axis Infrastructure Fund-II.
HCIL builds tracks, bridges, roads and does electrification work for the railways and has orders worth Rs 1200 crore. The company has laid 120 km of railway track and is involved in the work of another 200 km in Orissa.
Confirming the deal, Axis PE Managing Director Alok Gupta said, "The government has announced investments of $12 billion in the railway sector and dedicated freight corridors between Delhi-Mumbai and to the east. We expect the company to gain from these and expect the firm size to treble in the next 3-5 years.''
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Gupta said the fund would invest in power, aviation, hospitality, pipeline and logistics and is in talks with many companies for investment.
Betting on the capital requirement of nearly $500 billion in India's infrastructure in the next five years, domestic and foreign funds have announced infrastructure investments in the country.
UK's 3i has raised $1.2 billion India infrastructure fund while India's largest bank SBI along with Australia's Macquarie have announced a $2 billion core-sector fund.