Ascent Capital, the Bangalore-based private equity fund, is set to pump in $45 million for expansion of Karaikal Port, located in the East Coast of India in the state of Tamil Nadu. The fresh infusion of funds will be as part of a Rs 700 crore expansion which Karaikal Port is embarking on to expand the capacity by as much as 6 times to 28 million metric tonnes from the current 5.2 MMT. The expansion is expected to happen over a period 12-18 months.
Karaikal Port is controlled by Marg Ltd and this is the second round of private equity fund raising which the port is executing. The company had raised Rs 150 crore during early 2010 from IDFC Project Equity. The port majorly handles import of coal and also handles good quantity of cement and sugar exports.
Raja Kumar, founder & CEO, Ascent Capital, confirmed that the deal is happening but declined to spell out more details. This is the third major deal which Ascent Capital is executing after investing in GMR Energy and IVRCL from the fresh $350 million fund it raised during early 2010.
According to Venture Intelligence, research service focused on Private Equity and M&A transaction activity in India, infrastructure-related sectors accounted for 34 per cent of the investments in value terms (16 per cent in volume terms). Private Equity firms invested about $2.9 billion across 112 deals during the quarter ended June 2011. The amount invested during the quarter was over 45 per cent more than that during the same period last year (which witnessed $1.9 billion being invested across 70 deals) but 15 per cent lower compared to the immediate previous quarter ($3.3 billion across 91 deals).
Karaikal Port is the only all weather, deep water, multi-commodity port between Chennai port and Tuticorin port and is strategically located at the middle of this 680 km coastline. Awarded under BOT (build-operate-transfer) basis by the Government of Puducherry, Karaikal Port is in the process of completing 2nd phase of expansion by end 2011. The port will have 5 berths including mechanized coal berths, depth upto 16.5 mtrs, liquid cargo handling capabilities and specialized warehouses for agro products.
The port’s infrastructure with deeper draft capable of handling even Panamax vessels offers container lines an attractive port of call on the South East Coast of India, close to a region with a rich industrial base and high involvement in international trade. The port has a full suite of capable equipment for handling containers including 3 Liebherr Mobile Harbour Cranes, Reach Stackers and other associated equipment. According to industry information, the port had a turnover of Rs 170 crore a pre-tax profit of Rs 35 crore during last year.
MARG Limited, headquartered in Chennai, is an infrastructure, real estate development and services company and has projects worth more than Rs. 5000 crores under execution. MARG’s businesses are organized under 4 distinct business verticals – Marine Infrastructure & Services, Urban & Industrial Infrastructure, EPC and Real Estate.