SBI Macquarie
Our fund
SBI Macquarie Infrastructure Trust (“SMIT”) provides its institutional and other large-scale investors located in India with access to the growing number of investment opportunities available to the private sector in India’s infrastructure and infrastructure-like assets.
SMIT invests mainly in assets that provide essential services to the local communities in which they operate, have sustainable competitive advantages, and deliver predictable cash flows over the long term.
Investments
SMIT has now invested over one-third of its capital in businesses across power generation, telecom tower infrastructure and renewables, creating an investment portfolio that is well diversified by sector. Our co-investors are some of India’s leading participants in the infrastructure space including the Tata Group, Adhunik Group and Moser Baer India Ltd. A synopsis of current investments is as follows:
Viom Networks
Viom Networks Limited (“Viom Networks”)
Amount: INR 2,526 million
Investment highlights
Accounting for 21% of the portfolio, Viom Networks is India’s second largest tower companies in terms of tenancies with approximately 15% market share. The company boasts of an average portfolio tenancy greater than 2.4x and has two major anchor tenants, TTSL and Uninor. Viom Networks is 55% owned by the Tata Group, one of the largest conglomerates of India with high standards of corporate governance.
MB Power
MB Power (Madhya Pradesh) Limited (“MB Power”)
Amount: INR 1,887 million
Investment highlights
Representing 16% of the portfolio, MB Power (Madhya Pradesh) Ltd. is a 1200 MW coal based power plant being developed by Moser Baer group. With a strategic location in the power deficit Western Grid and an already in-place coal allocation from a subsidiary of Coal India Limited for the entire capacity, MB power has strong prospects in the region. Long term power purchase agreements are in place with a state utility and a power trading company for majority of the output. The remaining will be sold on a merchant basis.
Adhunik Power
Adhunik Power and Natural Resources Limited (“Adhunik Power”)
Amount: INR 259 million
Investment highlights
Accounting for 2% of the portfolio, Adhunik Power is a coal-based power plant located near Jamshedpur, Eastern India. With easy road, rail and air access, strong promoters (Adhunik Metaliks Limited, a listed company with a market capitalisation of approximately INR 11,370mn as at April 1, 2011) and a project allotted captive mine, execution risks in this greenfield investment are substantially mitigated. Long term power purchase agreements are expected to be in place for more than 60% of the output with the rest expected to be sold on a merchant basis.
Soham
Soham Renewable Energy India Private Limited (“Soham”)
Amount: INR 379 million
Investment highlights
Accounting for 3% of the portfolio, Soham is a hydro power holding company with two operational projects and five under implementation projects. In addition to the potential to provide attractive returns due to government initiatives such as Renewable Purchase Obligations, Generation based incentives and attractive Feed-in tariffs, this investment provides SMIT with a ready platform to develop and aggregate small hydro power plants in India.
Future investments
With portfolio diversification and attractive returns as primary objectives, SMIT continues to actively look at investment opportunities that fit its strategy and mandate. The management team is currently focussing on investment opportunities in the roads, renewables and logistics sectors.