Canada Pension fund to infuse Rs 1,000 cr in L&T Infra

This would be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company

CPP Investment Board Singaporean Holdings 1 (CPPIBSH), a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), will invest Rs 1,000 crore in L&T Infrastructure Development Projects Ltd (L&T IDPL), a subsidiary of Larsen & Toubro (L&T).

This will be followed by a second tranche of Rs 1,000 crore, after 12 months from the date of the initial investment subject to any required regulatory approvals applicable then. CPP will invest in preference shares of L&T IDPL, compulsorily convertible into equity shares by 2018, at a valuation to be determined according to a mutually agreed process. After conversion, CPP would hold a minority stake in the equity capital of L&T IDPL, said the company.

This is likely to be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company.

R Shankar Raman, chief financial officer and member of the board, L&T, said, “With its long term view, CPPIB would be an ideal partner for L&T and will provide growth capital to L&T IDPL to expand its infrastructure development business.”

L&T IDPL develops infrastructure projects in partnership with the central and state governments, private sector partners, financing agencies and communities. The company handles a portfolio of infrastructure assets with an estimated project cost of $7.5 billion, comprising 23 projects across sectors.