SriCity eyes $30-mn PE funding

Plans to invest around Rs 250-300 crore every year on infrastructure development

SriCity, an integrated business park which recently signed memoranda of understanding (MoUs) with Pepsi, Isuzu, Cadbury and others, is planning to raise $30 million from PE investors.

“SriCity invested Rs 1,000 crore to set up infrastructure and to acquire land and plans to invest Rs 250-300 crore every year on infrastructure development. These include roads, water, data connections and solar power. To support these investments, the company plans to raise money from private equity (PE) investors,” said Ravindra Sannareddy, managing director, Sri City.

“We are waiting for the market to pick up. Once things improve, may be in a year, we would be roping in a PE investor,” said Sannareddy. He said roping in some major international brands would help the company to attract investors. “Already, a few strategic investors from Japan have evinced interest in us,” he said.

The company is also looking at the electronics manufacturing industry and planning to create new clusters inside the business park. Sannareddy said the company is in talks with the Taiwanese and Japanese governments, which are planning to set up exclusive clusters inside the business park.

In 2013, the company signed MoUs with Cadbury (Rs 2,000 crore), Pepsi (Rs 2,000 crore) and Isuzu (Rs 3,000 crore). Besides, the company also signed MoUs worth Rs 5,000 crore with 30-40 companies. Some of the other MNCs, which have set up units in Sricity include Colgate-Palmolive, Kellogg's, Alstom, Kobelco and Nippon Seiki among others.

“What came as a surprise was the interest from the FMCG sector, since the recession did not hit the sector much,” said Sannareddy, who noted that most investors had chosen DTA (domestic tariff area) instead of Special Economic Zones, as these companies were looking to cater mostly to the domestic market.

The business park, spread over 7,000 acres (2,800 acres of SEZ and balance DTA) at Tada, on the borders of Tamil Nadu and Andhra Pradesh, commenced its operations in 2008. So far, MoUs worth Rs 20,000 crore have been signed and would create around 18,500 jobs, said Sannareddy.