Infrastructure India PLC (IIP), the Infrastructure fund listed with the London Stock Exchange has invested £16.5 million (Rs. 122 crore) in the MW Corp Group-promoted Shree Maheshwar Hydel Power Corporation (SMHPCL).
This is IIP’s second round of investment in SMHPCL. Earlier, IIP had invested in the project in 2008. It now holds 17.7 percent in SMHPCL, according to Dealcurry.
MMB Legal advised IIP with a team led by Partners Mahesh Madan Bhat and Talha Salaria along with Associate Ajay Prasad.
SMHPCL was advised by its in house team.
Speaking to Bar & Bench Partner Mahesh Madan Bhat said, “The Electricity Sector in India will continue to attract attention from investors, especially in view of the fact that the Government is promoting the sector and supporting the involvement of private sector players. This 2nd round funding indicates that investors are willing to back their original decisions with further investments, keeping long term returns in mind.”
Partner Talha Salaria added, “Any techno commercially viable infrastructure project in India, especially in the electricity generation space, is bound to find committed investors, who believe in the project, the promoters and the management team.”
According to VCCircle, Shree Maheshwar Hydel Power is the first private sector hydro project in the state of Madhya Pradesh. It is a 400 MW run-of-the-river project on the river Narmada, located at Mandleshwar in the district of Khargone – 108 km south-west of Indore. The project is expected to commence power generation by late 2011.
Dealcurry reports, IIP has also entered into a return guarantee agreement with SMHPCL, which guarantees a 17 percent IRR for IIP. If the guaranteed IRR is not achieved on the Group’s exit, certain shares in SMHPCL will be transferred to the Group.