Infrastructure, residential projects in Guj to get boost from overseas

At least US $ 100 million (approximately Rs 550 crore ) worth of overseas investment is likely to be made in different infrastructure and residential projects in Gujarat.

According to sources in the investment banking sector an Ahmedabad-based real estate firm is likely to raise US $ 50 million (approx. Rs 278 crore) through overseas private equity investments, while a greenfield port project may get similar amount of funding through offshore fund.

"An Ahmedabad-based real estate players is likely to get US $ 50 million for residential township project. The finding will be made by way of overseas private equity players," said Shailenndra Jindal, CEO, Continental Capital Advisors.

 

Jindal did not divulge the details of the company and the overseas investors. He also mentioned that the company is advising for financing of a greenfield port project in Gujarat. "We are advising to raise overseas funds for a greenfield port project in Gujarat. The quantum of investments will be around US $ 50 million. The funding is likely to be made through an offshore fund," added Jindal. However, the project is at the inception stage and will be realised over a period of time.

Sectors such as infrastructure, electricity, power, energy, green technology, automobile and ancillary industry, healthcare and education are some of the promising sectors in the state, where overseas financing players including venture capitalists and private equity players are looking to invest.

"In a unique model, a Gujarat-based IT firm is taking finance through offshore funds for its reverse logistics project. This project is mainly applicable in IT and electronics sector, where a consumer sends back the faulty goods to the manufacturer for replacement or repair," he said on the sidelines of Gujarat SME Banking Summit organised by SME Chamber of India in Ahmedabad on Tuesday.

Over the next two years, about Rs 200 crore will be invested through offshore funds in the project. Initially, Rs 25 crore worth of finance will be made in the next one month.

Commenting on the availability of finances for the SMEs, bankers maintained that there was increasing need for debt and equity finances to meet the funding requirements for SMEs.

"SMEs have remained resilient in the recent economic conditions. But there is a need to address the gap areas, where the conventional banking model is not reaching. This includes equity and debt financing, factoring and receivable management," said S Muhnot, chairman and managing director, Small Industries Development Bank of India (SIDBI).

According to Muhnot, there is a requirement of about Rs 2.5 lakh crore for equity capital for MSMEs, against which only Rs 3,000 crore is available through various banks. "There is a need to make equity capital available for MSMEs at every stage of their growth.

The bank has set a target to disburse Rs 5000 crore as a direct assistance to MSMEs. "We will use this finance through our fund of funds during the financial year 2012-13. So far we have disbursed Rs 300 crore under funds-of-fund," said Muhnot.

He further mentioned that a Chennai-based engineering services company, Thejo Engineering Limited has received funding through SIDBI's India Opportunity Fund and is the first firm to get listed on NSE's SME Exchange - a dedicated platform for SMEs. The listing will happen soon.