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The Indian infrastructure sector may not be investor friendly due to policy paralysis amongst many other hurdles but infrastructure advisory groups see overseas avenues for Indian companies.
Crisil Infrastructure Advisory, for instance, is currently pitching for investors to take part in a $750 million (around Rs 4,425 crore) Dau Giay-Phan Thiet Expressway project. Its a public private partnership project (PPP) which is calling for request for qualifications.
“The project has Viability Gap Funding and long-term funding from the World Bank that shall be onlent to the project by government of Vietnam,” said Pratyush Prashant, senior director of Crisil Infrastructure Advisory. He is confident that Indian investors who have held back domestic investments will see value in this international project.
Prashant believes that is an opportunity for investors who are not getting enough opportunities in India. “This investment is for medium to long term, as the money will flow in between 2015 to 2019. There are a lot of cash-rich groups in India,” he said. The firm is planning to raise as much as eight% of the project cost, around $65 million (around Rs 383 crore) in equity from investors.
“We are targeting funds, private equity investors, developers and also construction companies which are looking for engineering, procurement and construction (EPC) orders who do not mind putting in equity into a project,” said Kamran Khan, program director of World Bank's global infrastructure finance centre of excellence. It is also looking for investors in Hong Kong and Singapore as well.
As Indian infrastructure players have gained experience with public private partnerships, experts feel that they could now gain by investing in new opportunities abroad. “There are a lot of companies from countries like Mexico, Korea and China which invest overseas. It is more about the asset class than the geography,” said Khan.
Investing in East Asia, Khan believes, will help Indian companies diversify risk. “Investing all money into one 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 will have more opportunities for Indian to participate. The country is expected to bring in more highways under PPP mode. Apart from highways, Vietnam will also look at other infrastructure projects like sea ports, airports and also in the electricity sector. “But these opportunities might be a few years away,” said Prashant.
Crisil advisory is not limiting itself to bringing in Vietnamese projects to India. They are also looking for investors for a 40 megawatt hydro power project in The Phillipines, transportation and port projects in Africa. “There is money in the Indian market and it is all not going bare,” said Prashant.
The current Rupee devaluation also will not stop Indian companies go for international projects which could be expensive now. “Rapid forex devaluation is short-term and not long-term. We are looking at investments over 3-5 year timeline,” said Prashant.
