Baring Private Equity may invest Rs 370 cr in Oriental Tollways

Baring Private Equity Partners India, an India-focused fund, is understood to be close to investing Rs 370 crore in Oriental Tollways, part of the Rs 1,000-crore, New Delhi-based, Oriental Structural Engineers (OSE), a company focused on infrastructure development, specialising in highways and runways.

According to investment bankers close to OSE, the fresh infusion of funds will be used for the company’s equity contribution of various special purpose vehicles (SPV).

While a senior OSE official, who requested not to be named, confirmed interest from PE funds, Baring said it wouldn’t comment on market speculation.

BPEP India is currently investing from its third fund, with a corpus of close to $300 million (Rs 1,390 crore) with focus in the manufacturing, pharmaceutical, information technology and services sectors.

It has so far made one investment, in Sphaera, a start-up engaged in discovery and development of pharmaceutical drugs, with a business model focused on out-licensing and co-development.

Investment bankers close to OSE said Oriental Tollways was expected to divest around 15-20 per cent to raise Rs 370 crore, valuing the company at close to Rs 1,900 crore. According to industry information, it has four SPVs and is in the process of creating one more.

If the investment from Baring goes through, it will be the third time that Oriental Structures will be tapping the PE route. During earlier deals, it had raised equity from GE Capital and Ashmore for its realty arm.

OSE has, during the past few years, been accelerating its growth in the national and state highway sector and is understood to have executed more than 2,700 lane kilometres. It is an active participant in the National Highways Development Programme (NHDP), having done four-laning of stretches in various states at a total cost of around Rs 1,300 crore.

Its expected top line is Rs 1,500 crore during 2010-11 and it is expected to have net profit of close to Rs 100 crore.