Private equity major Apollo Global Management is investing Rs. 2,250 crore ($500 million) in three companies of B.K. Goenka-promoted Welspun Group, a Mumbai-based pipe-to-textiles manufacturer.

As part of the investment, Apollo will invest Rs. 1305 crore (approximately $290 million) in Welspun Corp Limited (WCL), a pipe manufacturer. Apollo is acquiring minority stake in Welspun Maxsteel Limited for Rs. 270 crore (approximately $60 million).  Apollo is also looking to invest Rs. 675 crore (approximately $150 million) in Welspun Infratech Limited, a subsidiary of WCL, which offers construction and infrastructure services in the country.

The Delhi office of Amarchand & Mangaldas advised Apollo with a team led by Partner Gunjan Shah. 

Khaitan & Co. advised Welspun with a team led by Partners Haigreve Khaitan and Anand Mehta.

The funds will be used by Welspun to expand through acquisitions of iron ore assets and also to invest in thermal and solar power plants.

This transaction is the second largest private equity deal of this year and the sixth largest investment in the country since 2009.

According to Khaitan & Co., the transaction is particularly significant given its large size in a time when the sentiment amongst the private equity investors for investing in India is relatively low given the internal issues like inflation and corruption surrounding the Indian economy.

According to VCCircle, this will be the second major investment in India by Apollo, which has assets under management of $70 billion. In 2009, buyout major Apollo had picked up 11 per cent stake in Dish TV, the country’s largest direct-to-home (DTH) operator, for $100 million (Rs. 465 crore). Apollo was advised by Amarchand and Luthra & Luthra had advised Dish TV.

The largest deal of this year took place when Bain Capital and Singapore sovereign wealth fund GIC invested $850 million in Hero Investments & Bahadur Chand Investments to help buy 26 per cent stake in Hero Honda, India’s largest two-wheeler manufacturer.

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