<article>Private equity firm Apis Partners LLP is acquiring a 25.1 per cent stake in L&amp;T Infra Debt Fund (L&amp;T IDF) for $110 million, according to an announcement.</article>

Private equity firm Apis Partners LLP is acquiring a 25.1 per cent stake in L&amp;T Infra Debt Fund (L&amp;T IDF) for $110 million, according to an announcement.
L&amp;T IDF, a subsidiary of L&amp;T Finance Holdings and part of the engineering-to-software behemoth Larsen &amp; Toubro Group, is a specialised re-financier of operating infrastructure projects in India with a loan book of Rs 8,000 crore.
The investment in L&amp;T IDF will be routed through Apis Growth Fund II that will support the growth the NBFC’s loan book across a number of infrastructure sub-sectors in India such as renewable energy, roads, power transmission, airports and ports.
As of latest stock exchange disclosure on 31st December, 2018, L&amp;T IDF’s non-performing assets was nil. This is significant given that infrastructure, as a sector, is staring at an acute liquidity crisis since availability of credit is drying up.
While banks are reluctant to dole out fresh capital to infrastructure companies with their own stressed-loan pile going up, the mounting number of arbitration matters within the sector is pulling out its overall growth prospects, thereby holding up its working capital.
Data available with CII shows that over 1.8 lakh cases are currently pending with six tribunals dealing with telecom, electricity, consumer disputes, taxes and environmental matters.
In the current transaction, out of the total investment amount, as much as 70 per cent will be in the form of growth capital for L&amp;T IDF, while the remaining 30 per cent will be used to acquire shares from existing shareholders, according to a statement.
“Our IDF business has built significant strengths in core areas of renewable energy, road and transmission financing, resulting in a high-quality loan book and consistent returns,” said Dinanath Dubhashi, Managing Director &amp; Chief Executive Officer, L&amp;T Finance Holdings Ltd. “This partnership with Apis is a reflection of the value creation that the Indian infrastructure financing space offers to investors looking for sustainable returns in the long-term.”
Road Ahead
Despite the current hiccups, growth prospects of the infrastructure sector remains strong. According to CII, even a 1 per cent increase in physical infrastructure in the country has the potential to raise India’s GDP growth by as much as 1-2 per cent.
Today, infrastructure companies have an all-time-high order book of anywhere between 2.5x and 3x of their annual turnovers, which is increasingly drawing investor interest.
Infrastructure spans a range of sectors from roadways to airways, ports to airports and power generation facilities that offer significant opportunities. “The India infrastructure market offers significant growth opportunities for specialised re-financiers,” said Shiva Rajaraman, Chief Executive, L&amp;T Infra Debt Fund.
Echoing the same sentiment, Udayan Goyal, Co-founder and Managing Partner, Apis Partners LLP said: “We look forward to helping the team to expand its presence in international capital markets and to create further efficiencies through digitisation and the use of technology across its operations.”
In the first quarter of 2019, private equity (PE) firms invested $5033 million across 18 deals in the infrastructure sector, accounting for about 48 per cent of the total investment value, according to data available with research firm Venture Intelligence.
And, a further breakdown of the numbers show that the infrastructure sector recorded a 39 per cent increase in investments between January and March this year from the corresponding period last year. In 2018, fund managers invested as much as $3625 million (spread across 13 deals) during the said period.
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The investment will support the growth of L&T IDF's loan book across sectors such as renewable energy, roads, power transmission, airports and ports.

Apis Partners picks up 25.1% stake in L&T IDF for $110m

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Apis Partners picks up 25.1% stake in L&T IDF for $110m

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