U Fund, India's first urban infrastructure fund, has picked up a stake in two road projects in Tamil Nadu and Andhra Pradesh promoted by the GMR group.
U-Fund has picked up a nine per cent stake for Rs 9 lakh in GMR Tambaram-Tindivanam Expressways and a seven per cent stake for Rs 7 lakh in GMR Tuni Anakapalli Expressways.
Apart from picking up equity in the two projects, U Fund has also invested Rs 91 lakh and Rs 43 lakh as preference capital in GMR Tambaram Tindivanam Expressways and GMR Tuni Anakapalli Expressways, respectively.
The GMR group will hold 65 per cent and 67 per cent stakes in the Tamil Nadu and Andhra Pradesh projects, respectively. United Engineers Malaysia, the technical partner, will hold a 26 per cent equity in the both projects.
"The stake was picked up recently. The decision was prompted by the fact that these are sound projects. Further, the Feedback group was involved with the preparation of the bid documents for both these projects as well as in selection of the technical partner," a Feedback group spokesman said.
U-Fund is sponsored by the Feedback group and promoted by a clutch of financial institutions led by the Industrial Development Bank of India. The other major investors in the fund are Infrastructure Development Finance Company, Unit Trust of India, Life Insurance Corporation, General Insurance Corporation and Housing Development & Finance Corporation.
The fund has a corpus of Rs 100 crore and has been set up with the specific purpose of investing in the equity of medium-sized infrastructure projects.
The Tamil Nadu project comprises a 93 km Tambaram-Tindivanam stretch in the Chennai-Chengelput route. This consists of upgrading and strengthening of the existing four-lane divided highway and widening of the two-lane highway. The total cost of the project has been pegged at Rs 428 crore.
The Rs 315 crore Andhra Pradesh project consists of widening the existing two-lane highway in the Vijayawada-Visakhapatnam stretch to a four-lane divided dual highway. Both these are annuity-based projects and were awarded through the competitive bidding route.
Apart from these two projects, U-Fund had earlier this year picked up a 26 per cent stake in a Kolkata-based car park project promoted by the Simplex group for Rs 80 lakh. This project was conceived for decongesting the city. It also has a stake in a 40 mw co-generation plant in Tamil Nadu.
