avendus infrasight

AVENDUS INFRASIGHT

AVENDUS INFRASIGHT

Dear Reader,

We are proud to present the anniversary edition of Avendus Infrasight! Over the last year it has been our effort to provide you with ideas and insights across the spectrum of Indian infrastructure – decoding the Indian coal crisis, evaluating the scope for international players in Indian ports, exploring an opportunity beyond traditional infra in border check post projects, and a glimpse into the business opportunities provided by the upcoming waste management sector in India.

In this edition, we bring to you a focus piece on the Indian roads segment. Roads have played a significant role in the economic progress of the country by facilitating the movement of goods and people across India’s vast geography. After years of explosive growth, the roads segment has reached a point where it is faced with a multitude of challenges. Companies in the segment are having to reconcile with the changes in the macroeconomic environment and re-evaluate their growth plans. Several opportunities are appearing for secondary purchase of assets in the current market. This holds great promise for deal activity in the coming quarters with financial sponsors backing players in developing road platforms.

On the deal front, we have already started seeing some action in the roads segment. Recently Ramky Infrastructure sold a stake in their Gwalior bypass project to Era Infrastructure. Other transactions include Macquarie-SBI’s USD 150 mn stake purchase in Ashoka Concessions. The renewable energy space has also shown strong deal traction with recent transactions including Standard Chartered’s investment in Green Infra, Morgan Stanley Infrastructure Partner’s USD 212 mn investment in Continuum Energy and Asian Giants Infrastructure Fund’s USD 29 mn investment in Shalivahana green energy.

Infrastructure Team, Avendus Capital

CONTENTS Page

Summary 1

Key Performance Indicators 2

Roads – Time to Think Big 3

Market Snapshot 13

Transactions Snapshot 16

Newsline 17

Avendus Power Index 26

Abbreviations 27

Disclaimer: This report is not an advice/ offer/solicitation for an offer to buy and/or sell any securities in any jurisdiction. We are not soliciting any action based on this material. Recipients of this report should conduct their own investigation and analysis including that of the information provided. This report is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). This report has been prepared on the basis of information obtained from publicly available, accessible resources. Company has not independently verified all the information given in this report. Accordingly, no representation or warranty, express, implied or statutory, is made as to accuracy, completeness or fairness of the information and opinion contained in this report. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. Any decision or action taken by the recipient based on this report shall be solely and entirely at the risk of the recipient. The distribution of this report in some jurisdictions may be restricted and/ or prohibited by law, and persons into whose possession this report comes should inform themselves about such restriction and/ or prohibition, and observe any such restrictions and/ or prohibition. Company will not treat recipient/user as customer by virtue of their receiving/using this report. Neither Company nor its affiliates, directors, employees, agents or representatives, shall be responsible or liable in any manner, directly or indirectly, for the contents or any errors or discrepancies herein or for any decisions or actions taken in reliance on the report. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Company.

OCTOBER 2012

AVENDUS INFRASIGHT

KEY PERFORMANCE INDICATORS

AIRPORTS

PORTS

POWER

ROADS

5.2 4.7 5.2 5.5 5.0 5.0 5.0

1.2 1.2 0.9 1.0 1.1 1.10.3

16.0% 15.9%9.0%

2.4% 12.2% 4.9%

(10.1%)

-20%

-10%

0%

10%

20%

30%

0

2

4

6

8

Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12

Air Passenger Traffic (Mn)

Domestic International YoY Growth% (RHS)

29.2 30.5 29.1 30.9 29.0 30.929.9

22.119.4

15.5 16.4 21.116.4 2.9

(0.0%)

(12.0%)

(25.2%)

(16.2%)

6.7% (4.1%)

(35.8%)-40%

-30%

-20%

-10%

0%

10%

0

15

30

45

60

Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12

Air Cargo Volume ('000 Ton)

Domestic International YoY Growth% (RHS)

44 45

48

44

46

4445

3.8%

(7.1%) (6.3%)3.1%

(6.3%) (5.0%)

2.4%

-20%

-10%

0%

10%

20%

41

43

46

48

Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12

Major Ports Freight Traffic (MT) - Monthly

Cargo Traffic YoY Growth% (RHS)

531

561570

560

2.2%

5.7%

1.6%(1.7%) -5%

0%

5%

10%

15%

500

520

540

560

580

FY09 FY10 FY11 FY12

Major Ports Freight Traffic (MT) - Annual

Cargo Traffic YoY Growth% (RHS)

74.470.5

71.2

73.9 77.6 79.4 76.5

13.0%

8.8%14.4%

3.2% 2.8%5.9%

2.7% 0%

5%

10%

15%

0

25

50

75

100

Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12

%p.a.BU Power Generation

Power Generation YoY Growth% (RHS)

7,574

6,210

4,6895,521

4,884 4,963

7,076

3.9 4.04.3 4.4 4.4 4.3

4.03.0 3.0

4.13.3 3.4 3.6

4.5

2

4

6

8

0

2,000

4,000

6,000

8,000

Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12

INR/UnitMU Traded Volume and Price

Bilateral Volume Exchange VolumeBilateral Price (RHS) Exchange Price (RHS)

78

151 164

225

18 779

1,697 1,947

2,109

99 0

500

1,000

1,500

2,000

2,500

0

50

100

150

200

250

Q1-FY12 Q2-FY12 Q3-FY12 Q4-FY12 Q1-FY13

KmINR Bn Project LOA Awarded by NHAI

Project Cost Length (RHS)

643

3,360

5,059

7,400

2,205 2,693 1,784

2,500

0

2,000

4,000

6,000

8,000

FY09 FY10 FY11 FY12E

KmNHDP: Projects Awarded and Completed

Length Awarded Length Completed

Source: Indian Ports Association

Source: Central Electricity Authority

Source: DGCA

Source: Central Electricity Regulatory Commission

Source: DGCA

Source: National Highway Authority of India Source: Ministry of Road Transport and Highways

Source: Indian Ports Association

AVENDUS INFRASIGHT

ROADS – TIME TO THINK BIG

INTRODUCTION

Roads are, by reckoning, the lifeblood of trade and social utility for any growing economy. For India, they carry the majority of the land freight and passenger traffic and have helped generate prosperity. Hence, this segment of infrastructure has seen significant investment and would continue to do so in the foreseeable future. With favourable regulatory policies and well defined PPP framework, this segment has also witnessed active private sector participation. However, with the last four years witnessing an economic downturn, the segment has now reached a point of inflexion with many players currently struggling to execute projects and build out their portfolios.

With standard options of financing drying out, these players need to explore alternate avenues of financing. Players would continue to tap the private equity market for funds and interested business houses could infuse more liquidity in the system. However, the segment would need ample access to long term capital to ensure proper course correction. Hence, institutional investors like pension funds could emerge as the ideal source of financing for roads segment in India.

The segment still has the potential to create long term value and many players who are currently looking to aggregate road assets would create substantial value in the long term. Globally, construction majors have aggregated assets not only in their home countries but also across the globe. Further, unlocking value in matured assets and investing proceeds in projects with higher value creation potential has supplemented their asset aggregation strategy. Globally, even institutional investors like pension funds as well as private equity investors have aggregated road assets of varying maturities in their portfolio. Private equity funds as well as institutional investors could take a hint from their global counterparts and evaluate the feasibility of aggregating road assets in India.

The next few quarters are going to be an exciting time in the Indian roads segment from a deal making perspective. With several sellers trying to offload their assets, a secondary market has gradually developed. However, with the existing developers being financially strained, there are not many buyers to tap this market. An aggregation platform backed by a financial sponsor could forge the way ahead and at the same time introduce ample liquidity into the system.

Indian Roads segment has reached a point of inflexion

The roads sector in India has undergone a significant transition over the last two decades. Companies taking on the task of building the backbone of India’s economy started off as EPC contractors for government projects. This changed in 1995 with the introduction of the BOT model in India which has achieved tremendous success over the last decade.

This runaway success story in the Indian roads sector has become less pronounced recently owing to the global economic turmoil which started in 2008. Today, challenges faced by the Indian road sector are manifold: high interest rates, difficulty in raising equity due to weak capital markets, lengthening of execution cycle of projects, and increased competitive intensity at bidding stage of projects. Players have been attracted to this infrastructure segment owing to slowdown in project awards in sectors like irrigation and high regulatory uncertainty hovering around segments like power. Hence, many players, in order to accumulate projects, have bid aggressively even though such bids could not be justified by the traffic potential of those projects. Road BOT projects have been increasing in size and complexity with NHAI awarding some mega road projects over the last year. However, until teething problems such as delays in land acquisition and financial closure are not sorted out the private sector will struggle to benefit from these opportunities.

Most players who amassed debt on their books in order to fund projects have been hit by a double whammy of increase in interest rates and traffic numbers falling short of their estimates. According to Fitch, for majority of toll road projects, actual first year traffic underperformed projected traffic estimates by 45%. Traffic performance in line with, or above, management expectations is relatively rare. Many bids were made with a desire to enhance the top lines without keeping in mind the effect on margins. Such players are facing difficulties in achieving financial closure as banks have become more critical in stress testing projects and analyzing traffic estimates in order to gauge the project risk borne by the

AVENDUS INFRASIGHT

developer. Even projects which had obtained financial closure earlier are struggling to service their debt commitments without adequate sponsor support to supplement the project cash flows. Most projects are bank funded with floating interest rates. Over the last few years interest rates have increased by over 400 basis points adversely affecting project margins.

Several players in the Indian roads industry are currently facing varying levels of financial stress with the need to improve cash flows to service their debt obligations. For cash strapped holding companies, the idea for sale of BOT assets to reduce debt burden is gaining traction. Large road players, who had earlier stayed away from bidding aggressively, now stand to benefit as several project winners enter the market for stake sales. Some smaller firms who have found it difficult to raise funds for their projects are even contemplating selling assets at break-even point or distress sales of their assets. Firms could also look at unlocking equity from matured assets in their portfolio and using this developmental capital to fund projects under construction. This situation is leading to the creation of a hitherto unseen secondary market for road projects in India which is acting as an alternate opportunity to NHAI new project awards. This further increases the likelihood that companies will look to sell some assets going forward in order to trim their road portfolios to reduce debt and equity exposure. Players looking to fund their projects as well as stabilize their financial health are bound to explore alternative means for fund raising.

Alternatives to meet financing requirements are down to a minimum

As road projects require substantial capital investments, private developers need access to alternate sources of capital. Especially in the current scenario, when many developers are cash strapped because of their equity locked in their current portfolios. Hence, expansion of portfolio would require adequate financial support. Developers need to tap all sources be it capital markets, private equity funds or other strategic players to fund expansion of their portfolios.

…funding through equity capital markets has dried up

Post the recession of 2008 - 2009, Indian IPO markets had recovered and given an impressive performance in CY2010. The IPO markets have been quiet in 2011 and the trend seems to have extended to 2012. In 2011, IPO markets were dampened owing to worries about the global economy and declining growth prospects. However in 2012, regulatory concerns, policy inaction, and muted growth expectations especially for the Indian economy have further dampened investor sentiments. Over the past 2 years, almost no new issues have come to the market with several listings either getting scrapped or deferred. Poor investor sentiment has led to a decline in valuation multiples which do not reflect the underlying business prospects of companies who are trying to access the capital markets for funds. Even Foreign Institutional investment has been highly volatile in 2012. Private developers can tap this source of funds albeit at lower valuations.

Exhibit 1 Exhibit 2

6 8

5

4

8

1

73

102

3620

63

39

0

20

40

60

80

100

120

0

2

4

6

8

10

CY06 CY07 CY08 CY09 CY10 CY11

Trends in Indian IPO Market

Capital Raised (USD Bn) Number of IPOs

Source: Industry Research

-16

7,165

1,685

-206 -58 -86

1,853 1,945

-1,0000

1,0002,0003,0004,0005,0006,0007,000

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

Net FII Investment in India - 2012

FII Investment (USD Mn)

6 8

5

4

8

1

73

102

3620

63

39

0

20

40

60

80

100

120

0

2

4

6

8

10

CY06 CY07 CY08 CY09 CY10 CY11

Trends in Indian IPO Market

Capital Raised (USD Bn) Number of IPOs

Source: Industry Research Source: Avendus Research, SEBI

AVENDUS INFRASIGHT

…PE Funds continue to invest in roads but adopt a cautious and selective approach

PE funds, be it infra focused funds or sector agnostic funds, have been actively investing in the Indian infrastructure segment over the last five years. The roads segment has seen active regulatory reforms to attract private sector investment including institutional investments. The NHAI had bid out BOT projects on a massive scale and the same has been well received by private sector participants. Hence, the segment has seen significant traction from PE funds.

Exhibit 3: Table 1: Key Investment Themes

Source: Avendus Research

The significant themes which have emerged from the various PE investments in this segment point towards strong appetite of PE funds to taking exposure directly in road assets or through a portfolio aggregating road assets. PE Funds have even formed Joint Ventures to develop road assets demonstrating their belief in the value creation potential of this segment.

However, aggressive bidding from private developers and increasing difficulty in achieving financial closure for under development projects have lead to PE funds being increasingly cautious and selective in financing projects. PE funds have shorter investment life cycles in comparison to life of BOT assets and hence, look at exiting their investments within a time frame of 5 to 7 years. Weak capital markets have also increased uncertainty around possible exits. Hence, only a few select developers would be able to tap this source of funding while the remaining would have to explore alternate avenues for financing their projects especially long term sources.

…industry players and business houses could provide long term capital but might have low appetite

Business houses irrespective of their segment of activity deploy capital for the long term and tenures of investment are much larger compared to those of financial investors. Road BOT concessions provide an ideal opportunity for deployment of such capital. Since roads as a segment demands substantial capital investment, fund raising options are hence limited to either the current players in the segment or large business houses that currently have no exposure to this segment but have indicated interest in the same.

Through the NHDP, the NHAI has awarded BOT projects throughout India. The same has been complemented by project awards from many state PWDs. As a result, players in India currently own BOT projects across different states leading to multitudes of players operating or constructing either contiguous or neighboring road stretches. Accumulation of projects across contiguous stretches opens up avenues of multiple synergies in terms of cost reduction as well as monopolistic control over large road stretches. Also, opportunities for bidding for new projects have been drying out. With more emphasis on EPC contracts, the pace of NHAI road project awards has fallen in comparison to last year. In light of this, players in the road segment wanting to strengthen their BOT portfolio will tap the existing secondary market in the future. However, many of the developers are financially strained leading to a low appetite for paying premiums to

SN Category Key Deals

1 Direct Investment in Road BOT Assets

JP Morgan – NICE (2010, 2012), Deutsche Bank – IRB Surat Dahisar Project (2009)

2 Investment in Holding Company for Road BOT Assets

SBI – Macquarie – Ashoka Concessions (2012), 3i – Supreme Infra. BOT Holdings (2012), JP Morgan – Soma Tollways (2011), Xander Group – HCC Concessions (2011), 3i – KMC Infratech (2011), Norwest & Xander – Sadbhav Infrastructure Project (2010)

3 Joint Ventures

Ashok Piramal Group – IDFC - SNC Lavalin JV (2011), Khazanah – IDFC (2011), Morgan Stanley Infra – Isolux Corsan Concessiones JV (2011) TRIL Roads – Actis – Atlantia (2010)

319

71

174 163

271

0

90

180

270

360

450

2008 2009 2010 2011 HY2012

Roads : Private Equity Investment (USD Mn)

PE Investment (USD Mn)

Source: Avendus Research

AVENDUS INFRASIGHT

acquire such assets. This results in an inevitable valuation mismatch amongst the buyers and sellers, leading to many projects finding no takers.

However, as valuation multiples for the infrastructure segment are low, an opportunity exists for diverse business houses / conglomerates with limited or no exposure to infrastructure, to participate in this segment. India currently has many large business groups who fit this profile. Even within infrastructure, roads offer a lower risk investment opportunity when compared to other segments. However, uncertainties hovering around Government policies and regulatory frameworks as well as the current position of many of their peers who have entered this segment in the past have deterred such groups from entering the segment. Hence, road projects have not found many takers amongst these business houses.

However, private developers would continue to tap these alternate sources of financing as and when such opportunities arise.

Institutional Investors like pension funds could be the ideal source of financing for roads in India

Institutional Investors like pension funds accumulate long term capital and hence, are the most ideal candidates to do long term investments. Infrastructure investments are attractive to such institutional investors as they assist with asset – liability match that such funds are looking for. However, infrastructure investing covers a wide range of different project types and investment characteristics and not all the opportunities offer the attractive characteristics pension funds are looking for in the asset. Pension funds being buy and hold investors focus on long term regular income rather than capital accumulation and hence, are more interested in cash generating, lower risk investments. Road assets especially operational ones produce predictable and stable cash flows over the long term providing a low risk opportunity.

Globally, pension fund investment activity in road infrastructure has been at low levels but a few pension funds have started acquiring such assets. Pension funds in countries like Canada, South Korea and Spain have started investing in road assets not only domestically but also across the globe. The exhibit below highlights a few key investments of Canada Pension Plan Investment Board in road assets.

Exhibit 4: Canada Pension Plan Investment Board - Key Investments

Source: Company Websites, Avendus Research, Mergermarket

Indicates acquisition

As pension funds develop a greater appetite for investing in road projects, they would scout for opportunities which would provide greater returns. Projects in India provide a scope of much higher returns than that of developed economies like USA and Europe and hence, are well positioned to attract institutional investment.

Aggregation of road assets by institutional investors could be the effective solution that the segment has been looking for and would also aid them in diversifying cash flow volatility risk. Long term funding from institutional investors as well as

2008 2010

Country – Australia Target – Transurban Group Stake – 10% Amount – USD 627mn

Country – Australia Target – Intoll Group Stake – 100% Amount – USD 2,971mn

Country – Canada Target – 407 International Inc Stake – 10% Amount – USD 877mn

AVENDUS INFRASIGHT

active involvement of private equity funds and Indian business houses could go a long way in infusing liquidity in the roads segment.

Asset aggregation still remains the way ahead for road project developers in India

The road segment in India is currently faced with a liquidity crunch and developers do not have the multitudes of financing options as they did in the past. But the segment still has the potential to generate long term value. Individual projects when under construction involve a high degree of execution risk when compared to the operational period of such projects. Similarly, a portfolio of road projects spread across diverse geographies reduces the risk profile of the portfolio manifold when compared to individual projects and hence, is bound to attract investor interest. The opportunity of an alternate secondary market of road assets ripe with sellers also makes this an appropriate time to aggregate assets. Hence, aggregation of road assets into a portfolio still offers the most potent long term solution.

Many road developers in India have adopted the strategy of asset aggregation. The increased focus of the Indian Government on building a world class road infrastructure led to the launch of NHDP. This kick-started awarding of concessions for road projects to private sector developers. Post that, PWDs from many states in India like Maharashtra, Rajasthan, Madhya Pradesh, Andhra Pradesh etc have been active in awarding BOT projects. This opportunity attracted many private sector developers to invest in long term concessions as well as benefit from the sizeable EPC opportunity present during the execution of such projects. Players like IRB Infrastructure Developers, Ashoka Buildcon Limited and IL&FS Transportation Networks (ITNL), among the first entrants in the market, have created a sizeable portfolio of BOT assets and attracted significant investor interest both from the private equity market and the capital markets. Post listing, they have expanded their portfolio manifold which has significantly contributed to their growth. ITNL has even looked beyond India and invested in assets in China and Spain.

Table 2: Indian Players have significantly expanded their portfolios

SN Company Portfolio Size – Listing Current Portfolio Size

1 ITNL

Listing Date Mar - 2010 Total Revenue (FY09) INR 13,320mn Operational Lane Km 3,601 Under Cons. Lane Km 5,274 Total lane Km 8,875

Date Aug – 2012 Total Revenue (FY12) INR 57,294mn Operational Lane Km 4,329 Under Cons. Lane Km 7,531 Total lane Km 11,860

2 Ashoka Buildcon

Listing Date Oct - 2010 BOT Revenue (FY10) INR 448mn Operational Km 449 Under Cons. Km 430 Total Km 879

Date Aug – 2012 BOT Revenue (FY12) INR 2,702mn Operational Km 1,107 Under Cons. Km 112 Total Km 1,219

3 IRB Infra Developers

Listing Date Feb - 2008 BOT Revenue (FY07) INR 1,779mn Operational Km 443 Under Cons. Km 65 Total Km 508

Date Jun – 2012 BOT Revenue (FY12) INR 9,809mn Operational Km 1,263 Under Cons. Km 112 Total Km 1,375

Source: DRHP, RHP, Analyst Presentations, Avendus Research

AVENDUS INFRASIGHT

Many construction / EPC players have also ventured into the road BOT segment and have created sizeable BOT portfolios of their own. These portfolio companies have also seen significant private equity interest. L&T IDPL, Sadbhav Infrastructure, Era Infraprojects, Gammon Infraprojects, IVRCL, KMC Infratech, HCC Concessions, Soma Tollways are among the key players who have created large BOT portfolios. Similar trends have also been observed in more mature markets like Europe, S.E.Asia and Australia.

…developers across the globe have also aggregated assets to create sizeable portfolios

Global construction majors initially executed BOT projects awarded in their home countries. Many of the countries like France, Spain, Italy etc have at least one large private player operating a major portion of their motorway network. Gradually as opportunities shrank in the home countries, such companies ventured abroad. International expansion and aggregation of road assets abroad has now become a cornerstone of growth strategy for larger construction companies and road operators for the past few decades. The larger firms have set foot across the globe in countries like USA, Canada, South America, Middle East and Asia scouting for investment opportunities.

Table 3: Current Portfolio and Global Presence of Construction Majors

SN Company Revenue (USD Mn) Home Country Domestic Presence International Presence

1 Vinci SA 52,417 France Vinci Autoroutes has a network of 4,385km under concession in South and West France

Vinci Concessions has a portfolio of transport infrastructure and public facility concessions across 20 countries with 1,000km of motorway concessions spread across Russia, Slovakia, Germany, Greece, UK, Portugal and Canada

2 Ferrovial 10,328 Spain Cintra operates 1,200km of tollways in Europe across Spain, Greece and Portugal

Cintra also operates additional 800km of highways outside Europe across US, Canada and Ireland.

3 Atlantia Spa 5,997 Italy Atlantia operates 3,100km of motorways in Italy through its subsidiary Autostrade

Atlantia also has a portfolio of more than 800km of highways across Brazil, Chile and India. Atlantia has formed a JV with Bertin Group to manage 1,538km of motorways in Brazil

4 Abertis 5,306 Spain

Abertis Autopistas directly manages more than 1,500km of toll roads in Spain and more than 1800km of roads across France and Portugal

Abertis also manages more than 1,000km of roadways in South America across Puerto Rico, Chile, Argentina and Columbia

5 IJM Corporation Bhd

1,476 Malaysia IJM is managing a portfolio of ~409km of toll roads in Malaysia

IJM also manages a portfolio of 868km of tollways spread across India and Argentina

6 Transurban Group 1,189 Australia Transurban Group manages

~115km of tollways in Australia It also manages a portfolio of 83km of tollways in USA

7 UEM Group Bhd 1,042* Malaysia

PLUS Malaysia Bhd, a subsidiary, operates and maintains 973km of expressways in Malaysia

UEM Group also manages ~304km of highways in Indian and Indonesia

Source: Company Websites, Avendus Research, Bloomberg

Note: Revenue numbers are either for year ending Dec-11 or Mar-12

*indicates FY10 Revenue for PLUS

Such aggregation has been achieved through cross border acquisitions where these companies have invested in both greenfield and operational road assets. This has given them an exposure to the fast growing emerging economies as well as diversified their revenue streams beyond their home markets. Majority of the acquisitions have happened in North America, South America and other European Countries.

In order to expand their portfolio further, global construction majors have also started participating actively in PPP projects internationally. A share of such action has also been seen in India. Companies from as many as 16 countries

AVENDUS INFRASIGHT

spread across Europe, UK, China, Middle East, S.E.Asia, Russia and USA currently participate in NHAI projects either independently or through JVs with Indian players.

But even when expanding their portfolio, such players have also unlocked value from their existing matured assets and channelized their funds into newer projects.

…asset aggregation strategy has been constantly supplemented with asset rotation

Companies have unlocked value by selling more mature assets in their portfolio. The funds raised in the process have been used for investing in new projects with high value creation potential. This has also improved the financial health of these companies by enhancing liquidity. Private equity funds, pension funds, institutional investors as well as strategic peers have readily invested in such mature assets as it fits their investment appetite.

Vinci, a French construction major and Cintra, a subsidiary of Ferrovial, have aggregated assets organically by bidding for projects across the globe. Exhibits below highlight how they have also expanded their portfolios through the acquisition of assets from other players and have carried out frequent asset rotation to churn their road portfolios.

Exhibit 5: Vinci Acquisition and Asset Rotation Strategy


Indicates acquisition Indicates Asset / Stake Sale

Exhibit 6: Cintra Acquisition and Asset Rotation Strategy


Indicates acquisition Indicates Asset / Stake sale

Seeing how the European markets have developed, aggregation of assets seem to be the path of creating long term value in the road segment in India. Frequent asset rotation and value unlocking would also improve liquidity for Indian developers. However, the current situation demands a different vehicle to act as an asset aggregator. The vehicle should be majorly funded through a financial investor and not through a project developer. But success of such a vehicle is highly

2002 2005 2006 2007 2008

Country – Chile Target – Autopista del

Bosque SA Stake – 100% Amount – USD 11mn

Country – Spain Target – Autopista

Trados 45 SA Stake – 50% Amount – USD 250mn

Country – Chile Target – Interval Chile

SA Stake – 60% Amount – USD 300mn

Country – Chile Target – Interval Chile

SA Stake – 40% Amount – USD 215mn

Country – Canada Target – 407 Express

Toll Route (ETR)

Stake – 10% Amount – USD 876mn

2006 2009 2010 2010 2011

Country – France Target – Autoroutes du

Sud de la France

Stake – 14.4% Amount – USD 770mn

Country – Chile Target – Autopista del

Bosque SA Stake – 100% Amount – USD 11mn

Country – France Target – Autoroutes du

Sud de la France Stake – 77% Amount – USD 20,367mn

Country – France Target – Cofiroute SA Stake – 17.1% Amount – USD 1,006mn

Country – Portugal Target – Lusoponte

Concessionaria para a Travessia do Tejo SA


AVENDUS INFRASIGHT

dependent upon the appetite of a financial investor to aggregate road assets and its ability to build up a capable management team to manage these assets.

…globally, financial investors and their Indian peers have readily aggregated road assets

Indian roads segment has seen significant private equity action over the past few years. As already highlighted, a key theme of private equity action has involved investment in road asset holding companies from infrastructure focused as well as sector agnostic private equity funds. This clearly indicates that financial investors in India also have an appetite for asset aggregation. Their global peers have even aggregated road assets all across the globe.

Globally financial investors have invested in various assets depending upon their risk appetite. This exposure could vary from under construction Greenfield projects to operational and mature assets. In case of mature assets, the key strategy involved is timely investing which in turn provides the investors with ample residual life of assets to realize their targeted returns. Infrastructure Funds like the Macquarie group have even aggregated road assets on a global scale. The exhibit below highlights some of the key acquisitions of the group at a global level over the last 10 years.

Exhibit 7: Macquarie group global investments


Indicates acquisition Indicates Asset / Stake Sale

*indicates sale to infrastructure funds, asset management groups, pension funds etc

Country – UK Target – Connect M1 –

A1 Ltd* Stake – 50% Amount – USD 597mn

Country – South Korea Target – New Daegu

Busan Expressway*


Country – Portugal Target – Lusoponte

Concessionaria para a Travessia do Tejo SA


Country – USA Target – San Diego

Expressway LP Stake – 100% Amount – USD 63mn

Country – S. Korea Target – Baekyang

Tunnel Ltd Stake – 99% Amount – USD 106mn

Country – South Africa Target – Trans African

Concessions (Pty) Ltd

Stake – 26.9% Amount – Undisclosed

Country – Australia Target – Westlink

Motorway Ltd Stake – 50% Amount – USD 515mn

2002 2004 2006 2008 2008

2009 2010 2010 2010 2012

Country – Canada Target – Macquarie Atlas

Roads Group Stake – 100% Amount – USD 2,204mn

Country – France Target – Societe des

Autoroutes SA

Stake – 100% Amount – USD 1,441mn

Country – Mexico Target – Desarrollos

Carreteros del Estado de Durango, SA


Country – Canada Target – Intoll Group* Stake – 100% Amount – USD 2,971mn

Country – India Target – Ashoka

Concessions Ltd


AVENDUS INFRASIGHT

Since assets in India have the potential of providing greater returns when compared to matured markets like Europe and US, financial investors interested in aggregating assets should tap into the existing opportunity in India. Hence, asset aggregation is the way ahead for Indian road segment and it presents an excellent opportunity for both global construction majors as well as financial investors.

Road asset aggregators backed by financial sponsors could forge the way ahead

Developers continue facing difficulties in financing their under construction assets. As a result, they have been attempting to rotate their operational assets to unlock value and equity to be channelized in to their under construction projects. For improving liquidity, even the NHAI is considering bringing in reforms to allow project developers to dilute stakes immediately post commissioning of their projects. Hence, there would be an increase in number of developers willing to dilute stakes in their assets making this an opportune time for aggregation of assets. However, there are not enough developers with substantial financial backing to tap this opportunity. Hence, the aggregation should happen through a platform such that the major financial support is not provided by a private developer.

The platform would consist of a financial investor, be it a private equity fund or an institutional investor like a pension fund, as a majority partner and a construction / EPC player as a minority partner. The platform would then aggregate already operational road projects spread across India in turn providing exit to the existing developers. With developers currently facing a cash crunch and looking to channelize equity into their under construction projects, they would be willing to sell assets at an IRR of 14 – 16%. The minority partner would also take up the ancillary activities related to road projects like O&M, major maintenance, toll collection etc for the remaining lives of these assets. With the increasing diversity of the portfolio, the outstanding debt of such projects would be refinanced at lower interest rates. A portfolio of 10 – 12 road projects can be aggregated and the platform would hold such projects for a period of 3 – 4 years and then explore exit options be it IPO or secondary sale to other financial investors. This process would lead to significant value creation and yield high returns for the financial investor as well as the minority partner. The exhibit below highlights the value creation process.

Exhibit 8: Value Creation through a Road Asset Platform

Highway projects are generally bid to achieve base equity returns in the range of 18 – 20%. Among the various phases of a concession, the construction period involves the maximum execution risk. Post operations, the toll receivables can be

Aggregation of Operational Asset Operation & Refinance Listing / Exit

Aggregation of Operational Assets

Toll Securitization / Refinancing facilitate front ending of returns

IPO on creation of a portfolio of 10 – 12 projects

BASE EQUITY RETURNS

Discounting of future cash flows at 12 – 14% cost of equity

Free cash flows discounted at 150 – 200 bps below senior debt cost

30 – 40%

22 – 24%

18 – 20% Targ

et E

quity

IRR

AVENDUS INFRASIGHT

securitized while the annuity projects have a steady stream of fixed cash flows coming into the project. Reduction in project risk post commissioning of the project leads to refinancing of debt at lower interest rates. As the assets are aggregated over a period of 3 – 4 years, the platform cash flows gradually stabilize. Such a platform would then form a good IPO story where in the capital markets would discount the future cash flows at 12 – 14% cost of equity. The platform would also be an ideal sale candidate to institutional investors as it suits their risk – return profile opening various avenues of secondary exit for the initial stakeholders. The table below highlights the key advantages for the stakeholders.

Table 4: Key Advantages for the stakeholders

SN Stakeholder Key Advantages

1 Financial Investor

• Investment risk is minimized as there is no exposure to the construction phase of BOT projects

• A platform of operational BOT assets would form a good IPO story easing exit concerns for the Investor

• Steady and stable cash flows of the platform would appeal to an Institutional Investor providing alternate avenues of exit through secondary sale

2 Construction / EPC player

• Being a minority partner, the quantum of investment required would be low which is ideal for EPC players in the current market scenario

• It would have access to a steady stream of O&M revenues for the entire concession life of the BOT projects

• Stable cash flows from the platform would create liquidity and support equity infusion in other BOT projects being developed by the sponsor

Aggregation of operational road assets represents a win – win investment opportunity for both financial investors as well as private developers. Such a platform would go a long way in infusing liquidity in the Indian road segment by providing exit to the currently struggling developers.

CONCLUSION

The current market scenario presents an excellent opportunity to aggregate road assets. With many players struggling to finance and execute their projects, the segment would gradually head towards consolidation. Large players who currently have strong balance sheets should tap this secondary market for assets. However, an asset aggregation platform largely funded by a financial investor could offer the ideal solution to address the current liquidity crunch. Such a platform could be easily molded to suit the risk appetite of financial investors by aggregating only operational assets. Hence, the secondary market of road assets is going to see significant action in the near future as such asset aggregators and large developers look to build their portfolio.

There is hardly any doubt around the fact that the BOT model in roads segment is a long term success story. However, the reduced liquidity in the current system has raised some short term concerns around the same. As consolidation happens in the segment, such concerns would gradually be addressed. India still needs to pump in a large quantum of investment into its roads infrastructure to raise it to global standards. Hence, development of such infrastructure would create a sizeable BOT opportunity offering tremendous growth prospects to the road developers of today.

AVENDUS INFRASIGHT

MARKET SNAPSHOT All figures in INR million; Financials are for FY12 end (except as indicated); Market Capitalization figures and 1 Yr Return are as on Sep 28, 2012.

Large / Diversified

Company MCap EV NW Revenue EBITDA EV/EBITDA P/E P/B 1 Yr Return

Larsen & Toubro 9,80,133 14,17,848 3,11,402 6,51,421 87,699 16.2x 20.9x 3.1x 19.0%

BHEL 6,04,435 5,41,392 2,54,080 4,96,273 99,514 5.4x 8.5x 2.4x (22.6%)

Reliance Infra 1,41,383 3,10,504 2,43,403 2,50,329 27,826 11.2x 11.2x 0.6x 46.1%

GMR Infrastructure 96,532 4,14,260 1,13,096 87,165 17,582 23.6x N.A. 0.9x (8.3%)

Lanco Infratech 36,237 3,34,416 56,579 1,02,866 18,394 18.2x 4.1x 0.6x (4.4%)

GVK Power & Infra 23,056 1,48,368 65,982 25,807 6,840 21.7x N.A. 0.3x (7.6%)

Gammon India 6,497 90,061 24,914 83,302 7,357 12.2x N.A. 0.3x (33.4%)

Roads, Construction, and EPC


Jaypee Infratech 71,947 1,44,589 58,584 31,689 16,492 8.8x 5.6x 1.2x 0.2%

IRB Infra Developers 50,536 1,03,048 29,689 32,559 13,735 7.5x 10.2x 1.7x (5.0%)

IL&FS Transportation 37,795 1,37,216 30,573 57,294 14,656 9.4x 7.0x 1.2x (0.1%)

Era Infra Engineering 25,110 66,335 17,641 44,124 8,379 7.9x 16.9x 1.4x (10.0%)

Sadbhav Engineering 22,161 55,233 13,448 28,936 4,144 13.3x 18.6x 1.6x 12.1%

Punj Lloyd 18,132 64,428 30,068 1,07,840 8,973 7.2x 16.1x 0.6x 1.2%

IVRCL Limited** 14,255 38,070 22,704 68,548 7,374 5.2x N.A. 0.6x 32.1%

NCC 12,034 62,788 32,071 66,868 8,976 7.0x 17.7x 0.4x (21.6%)

Gammon Infra Projects 10,919 44,688 8,670 4,294 2,260 19.8x N.A. 1.3x 10.3%

Hindustan Cons Co 10,889 88,857 11,007 82,467 (4,096) N.A. N.A. 1.0x (37.6%)

Simplex Infrastructures 10,431 31,016 12,130 60,306 4,567 6.8x 12.6x 0.9x (6.4%)

Patel Engineering 5,387 30,431 16,401 36,831 4,613 6.6x 7.7x 0.3x (16.5%)

KNR Constructions 3,196 4,445 4,189 9,033 1,323 3.4x 6.5x 0.8x 11.2%

MBL Infrastructures 2,888 6,879 3,480 12,670 1,680 4.1x 3.9x 0.8x 31.0%

Madhucon Projects 2,745 47,604 3,104 5,770 464 N.A. N.A. 0.9x (47.2%)

CCCL 2,615 7,911 6,183 20,556 1,022 7.7x N.A. 0.4x (29.3%)

Ahluwalia Contracts* 2,532 4,503 2,757 14,582 209 21.5x N.A. 0.9x (61.4%)

C&C Construction 1,481 1,481 3,104 3,104 3,104 0.5x 0.5x 0.5x (47.4%)

Simplex Projects 643 3,256 2,173 4,983 475 6.9x 62.1x 0.3x (39.8%)

* indicates use of last available consolidated Balance Sheet and P&L data

** indicates use of P&L data for a period of 15 months

AVENDUS INFRASIGHT

Power Generation


NTPC Ltd 13,86,063 18,03,136 7,49,984 6,88,317 154,411 11.7x 14.1x 1.8x 2.6%

Reliance Power 2,75,463 4,12,055 1,75,712 27,668 6,239 N.A. 31.8x 1.6x 27.9%

Tata Power 2,53,800 5,55,326 1,24,977 2,58,451 53,253 10.4x N.A. 2.0x 8.5%

NHPC Ltd 2,37,404 3,55,147 3,06,786 81,523 47,744 7.4x 7.0x 0.8x (14.7%)

Adani Power 1,15,433 4,69,023 66,000 42,878 13,252 N.A. N.A. 1.7x (38.0%)

JSW Energy 99,633 1,92,878 57,501 62,654 14,478 13.3x N.A. 1.7x 12.6%

Jaiprakash Power 92,523 2,57,991 55,347 16,863 14,560 17.7x 23.1x 1.7x 3.5%

Torrent power 83,080 1,31,309 57,903 80,631 31,909 4.1x 7.9x 1.4x (18.9%)

CESC Ltd 41,435 85,853 48,450 60,240 9,720 8.8x 16.9x 0.9x 21.4%

Indiabulls Power* 35,545 51,287 44,101 1,678 (382) N.A. N.A. 0.8x 6.3%

KSK Energy 23,345 1,18,639 35,889 20,593 6,655 17.8x 15.5x 0.7x (38.9%)

Power and Infra Ancillary


ABB Ltd 1,69,664 1,66,973 25,345 74,680 2,830 N.A. N.A. 6.7x 15.9%

Crompton Greaves 80,892 94,806 36,266 1,13,010 8,036 11.8x 22.0x 2.2x (16.2%)

Engineers India 79,618 62,748 18,988 39,557 7,157 8.8x 12.4x 4.2x (1.6%)

Alstom T&D India Ltd** 51,073 48,774 6,938 19,289 1,747 27.9x 30.4x 7.4x (1.3%)

Alstom Projects India 30,590 28,290 6,939 24,918 2,311 12.2x 18.2x 4.4x (20.2%)

BGR Energy Systems 19,808 28,100 12,088 34,649 4,669 6.0x 8.8x 1.6x (12.4%)

KEC International 18,870 29,221 11,078 58,764 4,713 6.2x 9.0x 1.7x 24.3%

V Guard 11,818 12,875 2,106 9,960 935 13.8x 23.3x 5.6x 90.7%

Tecpro Systems 8,134 19,408 7,742 25,478 3,931 4.9x 6.6x 1.1x (26.7%)

Elecon Engg Co 4,592 11,048 4,587 16,212 2,087 5.3x 7.6x 1.0x (33.7%)

Kalpataru Power TX 3,860 14,953 19,800 53,413 5,004 3.0x 1.9x 0.2x (27.5%)

Mcnally Bharat Engg 3,444 10,066 4,191 26,679 1,533 6.6x 5.2x 0.8x (5.0%)

Bharat Bijlee Ltd 3,303 3,736 3,186 7,374 433 8.6x 6.2x 1.0x (11.9%)

Shriram EPC 3,140 19,927 7,128 18,912 1,455 13.7x 24.3x 0.4x (42.0%)

Jyoti Structures Ltd 1,284 9,925 6,614 26,852 2,950 3.4x 1.4x 0.2x 8.9%

Sunil Hitech 887 4,358 2,841 9,772 1,168 3.7x 2.9x 0.3x (11.9%)



AVENDUS INFRASIGHT

Ports and Shipbuilding


Adani Ports & SEZ 2,55,433 4,19,898 49,734 33,304 20,653 20.3x 23.4x 5.1x (21.8%)

Pipavav Defence 54,225 81,543 19,883 18,915 4,208 19.4x N.A. 2.7x (0.1%)

Essar Ports 37,947 92,723 22,668 11,310 8,910 10.4x 38.4x 1.7x 59.4%

Gujarat Pipavav Port 25,260 30,747 15,675 4,120 1,828 16.8x N.A. 1.6x (20.0%)

ABG Shipyard 19,124 51,916 14,929 25,162 6,982 7.4x 10.0x 1.3x (4.8%)

Bharati Shipyard 2,242 41,710 11,604 16,115 2,638 15.8x 2.5x 0.2x (23.5%)

Shipping and Logistics


CONCOR 1,24,231 97,195 55,551 44,143 10,230 9.5x 14.4x 2.2x 0.4%

Shipping Corp of India 27,645 76,450 67,343 44,671 233 N.A. N.A. 0.4x (28.5%)

AllCargo** 17,657 23,990 15,210 43,245 5,201 4.6x 5.9x 1.2x (3.6%)

Gateway Distriparks 15,823 15,256 8,141 8,358 2,504 6.1x 11.7x 1.9x 8.1%

Mercator 5,326 33,991 29,493 37,551 5,829 5.8x 17.7x 0.2x (10.3%)

GATI 3,507 7,803 2,956 12,094 925 8.4x 24.9x 1.2x (23.4%)

Aqua Logistics 2,910 2,841 5,236 3,129 184 15.4x N.A. 0.6x (27.3%)

Varun Shipping* 2,378 29,252 8,128 8,806 3,670 8.0x 16.1x 0.3x (18.3%)

Global Offshore Services 1,931 8,340 2,642 2,312 940 8.9x 7.5x 0.7x (4.3%)

Shreyas Shipping 744 1,438 1,535 2,723 242 5.9x 13.2x 0.5x (4.4%)

Chowgule Steamships 635 3,256 4,898 936 206 15.8x N.A. 0.1x (33.0%)

SKS Logistics* 142 446 323 239 106 4.2x 15.4x 0.4x (30.5%)

Other Segments


VA Tech Wabag 12,451 10,317 6,430 14,435 1,300 7.9x 17.0x 1.9x 29.6%

Triveni Engineering* 5,802 17,558 9,756 17,368 1,811 9.7x 26.1x 0.6x 5.0%

Ramky Infrastructure 5,786 25,568 14,457 39,709 5,922 4.3x 2.2x 0.4x (52.5%)

Pratibha Industries 5,088 12,878 5,576 16,760 2,235 5.8x 6.3x 0.9x 17.9%

Sanghvi Movers 4,125 10,973 6,775 4,715 3,154 3.5x 4.1x 0.6x (16.9%)

Hindustan Dorr Oliver* 1,894 4,216 2,573 10,884 848 5.0x 4.9x 0.7x (30.5%)

Ion Exchange India 1,860 2,307 1,444 7,340 280 8.2x 16.6x 1.3x 10.9%



AVENDUS INFRASIGHT

TRANSACTIONS SNAPSHOT Transactions during the period June-2012 to Sep-2012

Private Equity

Date Target Investor Sector Deal Size (USD Mn) Stake

23-Aug-12 Delhi Mumbai Industrial Corridor Development Corp

Japan Bank for International Cooperation

Industrial Corridor 4.7 26.0%

13-Aug-12 Ashoka Concessions Ltd Macquarie-SBI Infra Fund Roads 150.0 N.A.

07-Aug-12 Green Infra Standard Chartered Bank India Power - Renewable N.A. N.A.

17-Jul-12 Trishe Developers New Enterprise Associations Renewable Power Services 15.4 N.A.

28-Jun-12 Reverse Logistics Kleiner Perkins Caufield & Byers (KPCB), Sherpalo Ventures, Vertex Venture

Logistics 40.0 N.A.

27-Jun-12 Karaikal Port Standard Chartered PE Fund Ports 25.0 N.A.

25-Jun-12 Continuum Energy Pte Ltd Morgan Stanley Infrastructure Partners

Power - Renewable 212.0 N.A.

06-Jun-12 Shalivahana Green Energy Ltd

Asian Giants Infrastructure Fund

Power - Renewable 29.0 N.A.

Domestic M&A

Date Target Acquirer Sector Deal Size (USD Mn) Stake

04-Aug-12 Gwalior Bypass Projects (Ramky Infrastructure)

ERA Infrastructure India Roads N.A. N.A.

31-Jul-12 Modest Infrastructure Ltd Dempo Shipbuilding & Engg Shipbuilding 126.9 74.0%

Inbound M&A


24-Aug-12 Pipavav Defence and Offshore Engineering Co.

Saab AB Shibuilding 38.0 N.A.

01-Jul-12 Global Wind Power Ltd China Ming Yang Wind Power Group Ltd.

Cleantech N.A. N.A.

Outbound M&A


22-Aug-12 Gujarat NRE Coke Ltd. (Australia)

Jindal Steel & Power Mining 7.8 2.6%

23-Jul-12 CIC Energy Corp Jindal Steel & Power Mining 114.0 100.0%

AVENDUS INFRASIGHT

NEWSLINE Power

Centre makes privatization compulsory for SEB loan recast Financial Chronicle, Sep 25, 2012 The restructuring and rescheduling of loans would require concrete and measurable action by the distribution companies and the states to improve the operational performance of the utilities, said a government statement issued after the CCEA meeting. To monitor the progress of the turnaround plan, two committees at the state and central levels are proposed to be formed. The Centre would put in place a transitional finance mechanism for states that have an accelerated reduction in aggregated technical and commercial losses. "If one per cent of the losses are reduced, it will correspond with a central outgo of Rs 1,500 crore as incentive," said Umashankar. Though the move was welcomed by power producers, Ashok Khurana, director general, Association of Power Producers, said, "The loss reduction and tariff increase plans would need to be monitored very strictly so that the utilities are able to break even in the next three-four years. In the interim, they need to be provided adequate transition finance."

CIL board clears revised FSA Business Standard, Sep 19, 2012 The Coal India (CIL) board on 18-09-2012 cleared the final draft of the revised fuel supply agreement (FSA). However, a decision on price pooling would be taken after consultations with various stakeholders. "We have cleared the revised FSA approved on April 16. Power producers can start signing it from tomorrow," said Chairman and Managing Director S Narsing Rao. Fresh clauses would now be included in the FSAs already signed with 29 firms. On price pooling, the company would consult the Central Electricity Authority, as well as power producers. At the last board meeting, it was agreed the penalty slabs on failure to meet supply commitments would be revised, and the moratorium would be done away with. The board has now approved the cost price model for signing FSAs. This would provide imported coal at actual costs. After protests over its decision to opt for a mere 0.01 per cent penalty, CIL had agreed to 1.5-40 per cent penalties. CIL has expressed its willingness to accept and come up with an action plan on the de-allocated coal blocks.

Govt permits foreign investment in power exchanges DNA, Sep 15, 2012 The government on 14-09-2012 approved foreign investment of up to 49% in the power exchanges in the country. But, the country's merchant power market is not mature enough to attract many foreign players at this moment, says industry players. The Cabinet Committee on Economic Affairs (CCEA) has decided to permit foreign investment up to 49% in Power Trading Exchanges in compliance with SEBI Regulations; Central Electricity Regulatory Commission (Power Market) Regulations, 2010, Commerce and Industry Minister Anand Sharma said after the Cabinet meeting. Of this, total Foreign Direct Investment (FDI) should not exceed 26% while investment by Foreign Institutional Investors (FII) should be restricted to 23% of the paid-up capital. In India, just 2-2.5 per cent of total electricity demand is traded in the exchanges. In Scandinavian countries up to 70 per cent of power is routed through exchanges. The Government promotes competitive tariff based on long term power purchase agreements (PPAs) between State electricity distribution companies and producers.

Kudankulam controversy: SC refuses to stay fuel loading NDTV, Sep 14, 2012 The Supreme Court has refused to stop the loading of fuel into a nuclear reactor at the Kudankulam plant in Tamil Nadu, while stressing that safety of the people is of prime importance. In Kudankulam, hundreds of those who live around the plant, including women and children, waded into the sea as part of their one-day jal satyagraha to demand that the nuclear plant be shut down immediately. They say it threatens their lives and livelihood. The top court is hearing a petition filed by activist-lawyer Prashant Bhushan that underscores that fear. Mr Bhushan has pleaded that fuelling should not begin at the plant as 11 out of 17 key safety measures have not been implemented. The court will take up the case for detailed hearing next week on September 20, but has refused to stall the process of loading fuel, which was to have begun on in beginning of September, but did not as a fresh wave of protests began. "Safety standards are prime important. People in the area should be protected. They should have the right to know about their safety," the court observed.

CAG Effect - Govt wakes up to captive miners profiteering Business Standard, Sep 12, 2012 The brouhaha over coal block allocations has goaded the government into correcting the policy imperfections that have long prevailed in India's coal mining sector. It is planning a clause to make it mandatory for captive miners to take part in tariff-based bidding for power. A few miners have been selling power produced through coal from their captive mines in the open market to make profits. The coal ministry now plans to add the mandatory clause in captive miners' allotment letters. "The power ministry has asked the coal ministry to put a condition in the block allotment letters that captive coal block allottees will have to participate in tariff-based bidding process," a senior official close to the development told Business Standard. He added there were eight to 10 companies that held coal blocks, but continued to sell merchant power, an industry term used for electricity sold outside long-term power purchase agreements (PPAs) with power distributors. A few months earlier, the government had notified miners to take part in tariff-based bidding, after the coal and power ministries agreed on the need to pass on the benefit of cheap captive coal to consumers.

CAG report nails power mess, loss up to Rs 14,000 crore CNN IBN, Sep 07, 2012 In yet another trouble for the government, a new report by the Comptroller and Auditor General (CAG) has exposed the rot in the power sector. According to the CAG, the inefficiency of the National Hydroelectric Power Corporation (NHPC) has meant only two of 16 planned projects have been completed. The CAG report has said that the cost overruns have led to losses Rs 14,700 crore, adding that 10-year target of 11,813 mw was missed while only 1550 mw was added. It further says that the country is currently short of 17,000 mw of power. Had the project been completed on time, 70 per cent of India's power shortfall would have been met. The latest report has said that the NHPC and the Power Ministry caused a loss of 10,000 mw of power by not following procedure and trying to help private companies. Notably, more than half of India went without power for two consecutive days in July and August as power grids in the north and east tripped on excess demand.

AVENDUS INFRASIGHT

Delhi power tariff up by 600% since privatization The Times of India, Sep 05, 2012 Inflated power bills and alleged corruption in the discoms figured prominently on Day One of the Delhi assembly's monsoon session with BJP members demanding to bring the private discoms under the purview of Comptroller and Auditor General and the Right to Information Act. "As they cater to general public, their accounts must be audited by CAG and made public," said senior MLA Jagdish Mukhi, accusing discoms of "fooling" people by showing fictitious accounts that show them making losses. "Power bills are the most burning issue in the city with power tariff going up by 600% ever since privatization. With the Delhi government interfering in the working of DERC, its role has been restrained," alleged the BJP leader. Countering the attack on CAG issue, power minister Haroon Yusuf said the government had already given an affidavit to the Delhi high court giving its approval for it and is waiting for the court's decision. The opposition MLAs also came down on the government for failing to provide 24X7 power supply despite 10 years of privatization.

REC witness a record trade in August on IEX The Economic Times, Aug 31, 2012 In its 16th trading session, Indian energy exchange (IEX) witnessed a record trading figure of renewable energy certificates (RECs). Out of the 5,68,097 RECs that were available for sale, 2, 48,165 RECs were issued - the highest issuance for any month till date. IEX is one of the major power exchanges of the country. In the non-solar REC segment, IEX received buy bids of 2, 48,168 RECs and sale bids of 5, 68,097 RECs were received against which 2, 48,168 RECs were cleared at Rs 1500/REC. The price of non-solar REC came down from Rs 2,402/REC last month. In the solar REC segment, IEX received buy bids of 1,728 RECs and sale bids of 310 RECs were received against which 129 RECs were cleared at Rs 12,850/REC. RECs are generation based certificates issued to the power producers using renewable source of energy like solar, wind, hydro and biomass. Solar RECs are for solar power producers while non-solar one as are for all other renewable energy sources. RECs are electronically in demat form and are given to the producers who do not wish to sell the electricity produced at preferential tariff.

CERC can revise long term PPA unilaterally - Attorney General The Economic Times, Aug 28, 2012 The country's highest law officer has cleared the way for a hike in tariff of electricity from private producers by saying the central regulator can reopen longterm supply agreements in cases such as rise in fuel price. Going by the power ministry's recent calculations, power tariffs of projects such as the Adani's Mundra plant, which is up and running, could go up by Re 1 per unit at current imported coal prices. The opinion from attorney general G E Vahanvati, expressed in response to queries from the Forum of Regulators — the apex body of state electricity regulators — is a shot in the arms of private power producers Essar Group, Tata Group, Adani Group and Reliance Power. These companies , which are either already operating or are setting up plants, have been citing increase in imported coal prices to press for raising the tariffs they had bid for their projects. The consumer states have opposed the move.

Blackouts highlight acute credit (-ve) infra constraints: Moody's DNA, Aug 03, 2012 The widespread power blackouts that hit north, east and northeast regions of the country has a credit negative effect on the country's economic activity. "The power failure underscores the inadequacy of India's infrastructure, which inhibits the country's growth by discouraging investment and impeding productivity improvements," highlights the report on Moody's Credit Outlook. The global credit rating agency mentions power disruptions will further depress business sentiment. It has already been dampened by slowing growth and the government's inability to implement measures to revive investment. Although power supply interruptions are common in India, the scale of this week's disruption surpasses all others. The blackout hit eight states, while next day reportedly 20 states were affected, which have a combined population of about 700 million people. The breakdown in the power grid appears to have been the result of a mismatch between electricity demand and supply.

Blackout repeats, among world's worst outages The Hindu, Aug 01, 2012 Hundreds of millions of people across India were left without power on 31-07-2012 in one of the world's worst blackouts, trapping miners, stranding train travellers and plunging hospitals into darkness when grids collapsed for the second time in two days. Stretching from Assam to the Himalayas and the northwestern deserts of Rajasthan, the outage covered states where half of India's 1.2 billion people live and embarrassed the government, which has failed to build up enough power capacity to meet soaring demand. The second massive breakdown in as many days was caused by the continuing grid indiscipline on the part of the State Electricity Boards (SEBs) and power utilities that overdrew power from an already overstretched generation system. On 30-07-2012, the northern grid collapsed and it was restored after 15 hours. The Eastern and North-Eastern transmission lines too failed on 31-07-2012 afternoon. July 31, 1.05 PM, and half the nation left powerless, a complete blackout for a second consecutive day and this time, it wasn't just North India, complete blackout in West Bengal, Bihar, Odisha and Jharkhand.

Solar Power's share rising in the energy basket The Hindu, Jul 25, 2012 In the last 10 months, almost 117 million units of electricity consumed were drawn from the sun, at no extra cost to the consumers. The NTPC Vidyut Vyapar Nigam (NVVN) has fed 117 million units of solar energy into the grid procured from the first batch of the National Solar Mission. Almost 178 MW of solar power, mainly photovoltaic, is being added to the country's energy mix now. The eight States using this power are Rajasthan, Punjab, Maharashtra, Andhra Pradesh, Odisha, Tamil Nadu, Uttar Pradesh and Karnataka. Though solar power is more expensive than conventional thermal sources, consumers need not worry. The impact on the end price of electricity is minimal, , a senior official from the Ministry of New and Renewable Energy said. The average bundled cost of solar electricity at the consumer end today is around Rs 4.5 a unit. This is because the Government has prescribed guidelines under the National Solar Mission, which stipulates that every megawatt of solar power is bundled with conventional power (four units).

AVENDUS INFRASIGHT

Roads, Construction and EPC Govt likely to relax highway bid norms The Times of India, Sep 26, 2012 With virtually no bids coming for highway projects on toll mode, the road transport and highways ministry is likely to seek relaxation in the bidding norms. The ministry is now finalizing a proposal to move before the Cabinet for allowing NHAI to award the projects with 100% government funding, which have no takers under build-operate-transfer (BOT-Toll) mode. The highways ministry is also pushing for an approval to award projects with complete government funding where traffic flow is less than 10,000 PCUs (passenger car units) per day. At present, this norm is applicable for highway projects where traffic flow is less than 5,000 PCUs per day. At present, NHAI follows the waterfall system for awarding highway projects since the public-private-partnership (PPP) model was introduced. Under this system, in the first stage, tenders are invited on BOT-toll mode and in case there is no taker then annuity mode (government paying the entire cost to the company in staggered manner) is tried. If this also does not get bidders, then the authority awards the tenders on engineering-procurement-construction (EPC) mode.

Expressway begs for vigorous NHAI intervention The Times of India, Sep 21, 2012 Most roads in developed countries are built with public funds and are free to users. The rationale is that roads facilitate economic activity, provide linkage between communities and access to vital services. In countries facing budget restraints, toll roads provide a welcome source of financing for construction and maintenance of new roads. In toll roads, the consumer is made to pay with an assurance of lesser travel time, saving on fuel costs, fewer stops, comfort due to better surface of roads and improved safety. The Delhi-Gurgaon expressway has become a debatable issue between the public sentiment and the highway authority. The delay due to congestion has defeated the very purpose of such a facility. The responsibility to provide service to the consumer is primarily that of the government. The highway authority has the responsibility to approve such a design or system which would benefit the cause of such a toll road keeping in mind the growth of traffic on the highway and that of the cities it crosses. Similar is the case with BRT in Delhi, Rajiv Chowk and Hero Honda Chowk in Gurgaon amongst many other junctions and stretches which are facing a crisis due to design faults.

NHAI reforms to help step up contract awards: Lanco Infra The Hindu Business Line, Sep 20, 2012 Lanco Infratech Ltd said the reforms brought about by the National Highway Authority of India will present the next major opportunity for infrastructure companies. While NHAI has till date awarded 18,000 km of roads for private sector, 12,500 km was in the last three years. The recent reforms of NHAI will help step up contract awards. The private sector will have access to development of about 35,000 km more. The company management in its annual report for 2011-12 said opportunities are abound in the infrastructure segment both as a developer and an EPC player. However, it cautioned about the tough economic environment companies are faced with. Lanco has integrated its existing EPC thermal, hydel and construction into a single business. This places the company in a league where the entire EPC business in power sector is covered apart from other elements of infrastructure. The company now has about 4,000 MW of power plants capacity under operation, 6,048 MW under construction and another 7,133 MW under various stages of development.

Road min asks MoEF to solve clearance tangle The Pioneer, Sep 20, 2012 As fate of over 400 highways projects are uncertain over Forest and Environment Clearances, the Ministry of Road Transport and Highways has asked the Ministry of Environment and Forest to delink the grant of environment clearance from the forest clearance. In the wake of EC and FC emerging as major roadblocks in NH projects, MoRTH has sought delegation of more power to the regional offices of MoEF (for up to 100 hectares) for reserved forest and all powers for protected forest. “In case of widening projects, constructions should be allowed in the non-forest area as there is no infructuous expenditure involved in that. No Objection Certificate under Forest Rights Act 2006 should be dispensed with in respect of widening projects,” said a top MoRTH official. It has also sought exemption from public hearings for highway widening projects as provided under the earlier Environment Impact Assessment Notification of 1994. With several projects stuck for want of environment, forest and wildlife clearances, the Centre is also looking for viability for a single window system for EC and FC.

NHAI, Delhi-Gurgaon toll road operator settle dispute The Hindu Business Line, Sep 18, 2012 The National Highway Authority of India (NHAI) and Delhi-Gurgaon Expressway operator DS Constructions have agreed for an out-of-court settlement on the toll road dispute. DS Constructions’ contract as operator will not be cancelled. As a part of the settlement, the toll road operator has agreed to the NHAI’s demand to reduce charges for pre-paid monthly users by about a third. Also, it will introduce smart cards. But, it is not clear yet whether the operator has agreed to drop the one-time charge of Rs 1,500 for smart tags for vehicles. The parties informed the same to the Delhi High Court. The exact details of agreement were not available. With this move, the highways body expects to encourage more commuters to adopt tags for paying tolls and potentially reduce the time spent at toll plazas. “Office goers between Delhi and Gurgaon use the toll plaza for 20 days a month and not 30,” NHAI officials told Business Line, explaining the rationale.

Govt invites participation from private Cos for 22 road projects The Financial Express, Sep 17, 2012 The government has invited participation from private companies for building 22 road projects across country. "Request for annual pre-qualification for the 22 projects have been called with the last date of submission as October 16," Road Transport and Highways Secretary A K Upadhyay told reporters here. The Cabinet Committee on Infrastructure (CCI), approved the model EPC (Engineering, Procurement and Construction) agreement document for construction of two-lane National Highways Networks. At present, the National Highways Works not viable on BOT Toll or Annuity mode are taken up under traditional item-rate contracts, which are generally prone to time and cost overruns. The EPC contract has been structured in a manner that time and cost overrun in implementation of National Highways Works shall be minimised to a great extent and there will be optimisation of design and quality construction. Upadhyay said the government at the highest level is working towards removing bottlenecks in road projects.

AVENDUS INFRASIGHT

Now, toll revision annual affair The Pioneer, Sep 14, 2012 The toll charges on National Highways and Expressways will now be revised annually. The Centre is considering to do away with present practice or multiple revisions linked to Wholesale Price Index (WPI). The Finance Ministry is yet to respond over the Ministry of Road Transport and Highways (MoRTH) proposals on the subject. The MoRTH has taken note of the protest by road users against multiple revision. The Ministry’s recent hike in some of the sectors including Delhi-Chandigarh has led to another round of spat between the MoRTH and NHAI, according to sources. “There is always a difference of opinion between the Ministry (MoRTH) and NHAI over the issue. All discrepancies related to toll will come to an end when there is annual revision across,” said a top MoRTH official. Presently, NHAI has alleged the toll charges are revised to suit the concessionaires. Dispute between MoRTH and NHAI began when the Ministry sought to increase the annual change in WPI to 70 per cent from the existing 40 per cent few months ago while retaining the 3 per cent fixed rate.

Planning Commn. pegs 12th Plan roads outlay at Rs 9.2 lakh cr The Economic Times, Sep 13, 2012 Aimed at sprucing up the country's roads and bridges to bolster economic growth, the Planning Commission has projected Rs 9.2 lakh crore expenditure over the next five years. "The total investment is projected at Rs 9,02,071 crore during the 12th Plan (2012-17), of which Central and States' investments' will be Rs 3,58,845 crore and Rs 2,66,851 crore respectively," Planning Commission has said in a note. The Commission is aiming at an annual average economic growth of 8.2 per cent during the Plan. While the investment from the states and Centre would account for 68 per cent of the total projected investment, the remaining 32 per cent or Rs 2,94,374 crore, it hopes, will come from the private sector. The total investment in roads and bridges during the 11th Plan stood at Rs 5,16,180 crore, in which the Centre's contribution was 42.85 per cent or Rs 2,21,649 crore.States had contributed Rs 1,91,517 crore or 37.02 per cent and the remaining 20.13 per cent, valued at Rs 1,03,014 crore came from the private sector.

Infrastructure companies going slow on highway projects The Hindu Business Line, Sep 11, 2012 Faced with a tough business environment, infrastructure and construction companies are treading cautiously on tollways and build, operate and transfer mode (BOT) PPP projects of the National Highway Authority of India (NHAI). They now prefer the engineering, procurement and construction (EPC) mode projects. IVRCL indicated that it has decided to take a holiday from bidding for BOT projects to focus on EPC. This is not an isolated case; most infrastructure companies are in a pause mode re-strategising looking at EPC projects. Interaction with leading infra sector firms shows that they are all faced with difficulties of high interest costs, challenges of achieving financial closure, as banks and lenders have hit sectoral cap, and have been demanding more equity in a market where equity is hard to come by. M. Gautham Reddy, Executive Director of Ramky Infra, said the number of projects that have come up for participation are less and companies have become extra cautious, given the market conditions. They are looking at the opportunity to take up EPC mode projects where NHAI will pump in funds.

Construction rises 11% in Q1 Business Standard, Sep 10, 2012 Despite high interest rates and land acquisition woes, construction activities in the quarter ended June grew at a 19-quarter high of 10.9 per cent, against 3.5 per cent in the year-ago period. Players and analysts attributed the rise in construction to execution of road projects awarded by the National Highways Authority of India (NHAI) last year. Analysts said real estate developers focused on completing existing projects; they did not line up for new ones. A low base effect was also cited as one of the reasons for the growth in construction. Analysts said any positive effect of the delayed monsoon this year on construction activities would not be seen before the next quarter. Growth in construction, along with that in financial services, helped raise growth in gross domestic product (GDP) to 5.5 per cent for the quarter ended June, against market expectations of sub-5.3 per cent growth (growth in the quarter ended March was 5.3 per cent). With the services sector slowing below estimates, and low activity in the manufacturing segment, it was construction that raised GDP growth to levels more than expected.

Road projects may get PE push The Financial Express, Sep 07, 2012 Recognizing that creating a robust secondary market is key to reviving investor interest in highway projects and freeing equity locked up in completed projects, the National Highways Authority of India (NHAI) has proposed allowing private equity (PE) players and financial firms to pick up stakes in existing projects. In a note to the finance ministry, the authority has proposed allowing ownership change in build-operate-transfer (BOT) highway projects soon after they begin commercial operations. Currently, for projects floated after November 2009, equity stake transfers up to 100% is allowed two years after project completion. For projects prior to this, it is mandatory for a developer to hold a 51% stake in the concessionaire company until two years after project completion. Under the new proposal, not only the post-November 2009 projects, even earlier projects will be allowed stake transfer as soon as the projects are commercialized. However, this comes with a rider. The change in ownership will be allowed by NHAI only after assessing the technical and financial capability of new investors.

CAG slams NHAI for Rs 874 crore loss The Times of India, Sep 05, 2012 The National Highways Authority of India (NHAI) has drawn CAG's flak for the potential loss of Rs 874 crore on account of delays in completion of projects for connecting major ports through highways. The authority also incurred a revenue loss of over Rs 127 crore on account of delay in setting up special purpose vehicles (SPVs), it said. While five of the Rs 3,157 crore projects are yet to be completed, four saw delays of up to 53 months, the CAG said in its report tabled in the Parliament. "Due to ineffective toll collection operations of SPVs, toll collection was either delayed or suspended and SPVs sustained revenue loss of Rs 127.68 crore. Potential loss of toll revenue, due to delay in completion of PRC projects, worked out to Rs 873.85 crore," the CAG said.

AVENDUS INFRASIGHT

Airports

CCI questions DIAL's monopolistic pricing The Economic Times, Sep 28, 2012 India’s competition watchdog has raised concerns over monopolistic and arbitrary pricing by the public-private partnership that runs Delhi’s international airport, weeks after the national auditor slammed the government for the terms of the deal. The Competition Commission of India has sent an advisory to the aviation ministry highlighting the antitrust aspects of the deal, which would unfairly benefit the private firm, GMR Group, to the tune of . 3,415.35 crore, according to the Comptroller and Auditor General of India’s recent report. “Post the CAG report, we had taken a serious view of the matter and found the deal to be anti-competitive at various levels. We have asked for a clarification from the ministry as the agreement is against the letter and spirit of the Competition Act,” CCI chairman Ashok Chawla told ET.

Reliance Infra plans to exit non-metro airport business The Economic Times, Sep 07, 2012 Reliance Infrastructure is looking for buyers for its unit that handles non-metro airport projects, people close to the development told ET. The company, promoted by billionaire Anil Ambani, has invested about Rs 100 crore in five non-metro, brownfield airport projects in Maharashtra through its subsidiary Reliance Airport Developers Private Ltd (RAPDL). Reliance Infrastructure is now considering selling the business as it has shifted focus to larger projects, the persons, including a civil aviation ministry official, said. Reliance Infrastructure, which in the past has failed to bag any project for modernisation of the airports at Delhi and Mumbai, has maintained that it will consider bidding as part of an international consortium for larger projects, including those at Nagpur and Pune. Besides, the returns from the non-metro projects have not been as per the company's estimates. Lalit Jalan, the chief executive officer of Reliance Infrastructure, however, said: "We would not like to comment on market speculation. We have always said that we have de-merged our business into separate entities with the aim to create value for our shareholders.”

‘India needs $40 bn for developing airports’ The Indian Express, Aug 20, 2012 India will require $40 billion (over Rs 2 lakh crore at a rate of Rs 55 to a dollar) in developing its airports by 2025 to meet the needs of its growing air passenger traffic, Centre for Asia Pacific Aviation (CAPA) has said in its report. “Our projections show that airport passenger traffic will grow from 143 million in 2010-11 to 452 million by 2020-21. Over the same period the scheduled airline fleet is expected to grow from 430 to 1,030 aircraft, while general aviation could see even faster growth from 750 to over 2,000 aircraft,” CAPA has projected, basing it on a gross domestic product growth of 8 per cent per annum. Taking an optimistic view of the country’s air passenger growth scenario, the aviation think tank has said that the recent slowdown in growth is a short-term phenomenon. “It will not be long before India resumes sustained double-digit traffic growth and, at many airports across the country, capacity constraints will be encountered sooner rather than later,” says the report. Domestic passenger numbers, which has seen double-digits growth in the last two years, has witnessed a fall in the last three months.

CAG slams development fee, concessional land to Delhi airport The Times of India, Aug 17, 2012 Slamming the levy of development fee on passengers using Delhi airport, the CAG said the civil aviation ministry violated the bid conditions for the benefit of GMR-led DIAL to the tune of over Rs 3,415 crore and pressed fixing responsibility. CAG in its audit report on Indira Gandhi International Airport that was tabled in Parliament, said DIAL can potentially earn Rs 1,63,557 crore over a 60-year period from the land given to it on a lease of Rs 100 per annum. Allowing DIAL to levy development fee vitiated the sanctity of bidding process and led to undue benefit of Rs 3,415.35 crore to the private firm, it said. GMR Infrastructure holds 54 per cent stake in Delhi International Airport Ltd (DIAL). "It was noticed that ministry of civil aviation and Airport Authority of India, on some occasions, violated the provisions of the transaction documents in the interest of the concessionaire," the official auditor said. CAG said contrary to provision of the airport concession agreement, DIAL was allowed to use the amount collected as development fees to meet the project costs.

Privatize Chennai, Kolkata airport Operations : Plan Panel The Hindu Business Line, Aug 09, 2012 A Planning Commission task force has urged complete privatisation of the operations and maintenance of the Chennai and Kolkata airports. This includes both air and city-side facilities. The development of these airports, it recommended, should be through a private-public-partnership (PPP) concession. While structuring this arrangement, it should be ensured that the interests of the Airports Authority of India (AAI) employees are fully protected, the task force noted. To start with, bids for the Chennai airport could be awarded within the next four months, followed by the Kolkata airport, it has said. The task force, under the chairmanship of B.K. Chaturvedi, Member, Planning Commission, went into the financing plan for airports during the Twelfth Five Year Plan. The AAI has undertaken redevelopment and expansion of the Kolkata and Chennai airports at a cost of Rs 2,325 crore and Rs 2,015 crore, respectively. The work at Chennai has already been completed, and it will be over in Kolkata soon.

'Growing air traffic will fuel airport construction in India' The Indian Express, Jul 15, 2012 Burgeoning air traffic would prompt construction of second airports in five major metros and a third in Mumbai as an estimated USD 30 billion would be invested on such infrastructure over the next decade, an aviation consultancy firm has said. Over the next 10 years, Bangalore, Chennai, Delhi, Hyderabad and Kolkata are expected to provision for a second airport and Mumbai would need to start preparing for a third one, based on current growth estimates, the Centre for Asia Pacific Aviation (CAPA) said in a study. High traffic growth was also being witnessed at several non-metros with several airports having "already outgrown their existing infrastructure", the Sydney-based aviation consultancy firm said. "Projected growth will necessitate provisioning for a second airport at each of the metro cities and a third in the case of Mumbai, paving the way for a total of 13 metro airports. The Indian airport sector is expected to see a further investment of USD 30 billion including the cost of upgrading existing airports, provisioning for second airports at metros and construction of greenfield airports.

AVENDUS INFRASIGHT

Ports and Shipping

Spain’s Grup Maritim-led team quits Ennore project Mint, Sep 27, 2012 A consortium led by Spanish port operator Grup Maritim TCB SL and including Lanco Infratech Ltd may be barred from auctions at Union government-run ports for pulling out of a container terminal project at Ennore port in Tamil Nadu. The team, which includes Spain’s Obrascon Huarte Lain SA and London-listed Eredene Capital Plc, also faces a potential suit for damages, according to a spokesman for Ennore port, who declined to be named. Eredene Capital, a 22% shareholder in the consortium, announced the withdrawal in London a day before the final date for the consortium to tie up funds for the project. This is the second setback in less than a fortnight to the Union government’s plan to build container terminals at its ports through private funds, and could slow its efforts towards tripling the cargo-handling capacity at India’s ports by 2020.

'Port capacity to double in 5 yrs' The Indian Express, Sep 26, 2012 The capacity of Indian ports will have to nearly double to 2,302 million tonnes (MT) over the next five years to be able to handle the fast growing cargo traffic, the Planning Commission has said. "To meet the overall projected traffic of 1,758.26 MT by 2016-17, the total capacity of the port sector is envisaged to be 2,301.63 MT," the 12th Five Year Plan (2012-17) document has said. "The traffic forecast by the end of the 12th Plan would be 943.06 MT and 815.20 MT for the major and non-major ports respectively with corresponding port capacities of 1,241.83 MT and 1,059.80 MT respectively," it added. Total capacity of the country's ports, including 12 major and over 200 non-majors, stood at 1,247.45 MT in 2011-12 and together they handled 971 MT cargo. Major ports had the lion's share at 601 MT and the rest was done by the non-major ports. The Plan Panel expects Jawaharlal Nehru Port Trust to have the maximum capacity at 155.61 MT by 2016-17 followed by Kandla Port at 145.13 MT.

'East-coast ports will see increase in cargo traffic' Hindustan Times, Sep 24, 2012 Cargo traffic through India's West-coast ports, which have traditionally handled the bulk of the country's trade, is estimated to drop to 66% in 3-4 years from 77% in FY 2010, Chairman of Visakhapatnam Port Trust Ajeya Kallam has said. On the other hand, the share of East-coast ports would rise by as much as 11% in the same period, to 34%, Kallam said at the 2-day 'East Coast Maritime Business Summit', organised by Maritime Gateway, over the weekend. To take advantage of this, Visakhapatnam Port is planning to invest Rs. 13,000 crore on expansion, he said, adding that ports of the East coast would benefit from India's rising trade with South East Asian countries, and China. Visakhapatnam Port handled 67.41 million tonnes of cargo in 2011-12, against 68.04 million tonnes the previous year. But the cargo movement was hit to some extent by global slowdown, fall in iron ore export to China, and competition by ports in the neighbourhood, he said.

Indian ports caught in shallow waters The Hindu, Sep 09, 2012 Traffic at Indian ports grew by just 2 per cent in 2011-12 (a sharp contrast from 9.2 per cent CAGR recorded during 2005-06 to 2010-11). Had it not been for the healthy 25 per cent increase in coal traffic and a modest 8 per cent increase in container traffic, overall growth in port traffic may well have been negative during the year. The slowdown in traffic growth, combined with huge capacity additions of around 12 per cent in the sector, resulted in lower capacity utilisation in 2011-12. Despite lower utilisation rates, congestion issues continue to beset ports as turnaround times for most of the major ones still remain significantly high. This is because utilisation rates have been largely pulled down only by capacities handling iron ore and certain pockets of non-major ports. Major ports handling coal and container traffic continue to operate at near 100 per cent utilisation levels.

Government to adopt corporate model for two new major ports Mint, Jul 31, 2012 Two ports India intends to build in Andhra Pradesh and West Bengal will function as companies and not trusts as 12 of the 13 federal government-controlled ports operate. The two proposed ports will be established through a special purpose vehicle (SPV) with 26% equity from the respective state governments and 74% from the Union government, a shipping ministry spokesman said. This is a new development because until now all such ports are fully owned by the Union government. The SPV will invite bids to set up cargo-handling facilities at these ports that would be partnerships with private companies. An agreement for a major port at Sagar Island in West Bengal will be finalized by 1 August, while the location for the new port in Andhra Pradesh, from among the three sites suggested by the state government, will be decided by 31 August. The shipping ministry will seek approval for the new ports from the cabinet by 30 September, the ministry spokesman said. Building a new port will cost as much as Rs 2,000 crore. Currently, 12 of the 13 major ports function as trusts under a law framed about four decades ago called the Major Port Trusts Act, 1963.

Govt forms Committee to Scale Up PPP in Inland Waterways Press Release, Ministry of Shipping, Jul 17, 2012 A Committee has been constituted to scale up private investment in Inland Waterways Sector under the Secretary, Planning Commission. The Secretary, Ministry of Shipping, DG of Inland Waterways Authority of India (IWAI) and a representative of Department of Economic Affairs will be the members. This Committee would undertake a systematic effort to identify new areas for private investment, both in infrastructure and in transportation. It will also identify multiple business models which could then be bid out through concessions. This will be supplemented by designing Model Concession Agreements (MCA) and other standardised documents for facilitating a rapid scaling up of investment. The committee will assess the investment potential of the sector and come up with approaches and proposals for scaling up private investment in Inland Waterways. It will also suggest mechanisms to have standardised MCAs prepared quickly for possible areas of investment. Since January, PMO has identified and fast-tracked implementation of key projects in the National Waterways - 1, 2 and 3 (NW - 1,2,3).

AVENDUS INFRASIGHT

Infrastructure Finance

RBI relaxes ECB norms for infra Companies Deccan Herald, Sep 12, 2012 Giving a boost to infrastructure sector funding, the Reserve Bank has relaxed the External Commercial Borrowings (ECB) norms to help companies raise more funds from overseas markets. The RBI has allowed companies engaged in infrastructure sector to raise bridge finance from overseas market under the automatic route. Under the earlier provision, the companies were required to take permission of the RBI for raising bridge finance, which is a kind of interim arrangement for short-term credit. The RBI through a separate notification, has also allowed companies in infrastructure sector to raise ECB up to a maximum period of 5 years for importing capital goods. Under the new norms, the trade credit should not be for a period of less than 15 months and also not in the nature of short-term rollover finance. Earlier, the companies could raise ECBs for a period ranging from one year to three years. The RBI notification further said that the all-inclusive costs, which include arranger fee, upfront fee, management fee among others, of such borrowing should not be over 3.5 per cent of six months Libor.

Banks for easing investment norms to step up infra lending The Hindu Business Line, Sep 09, 2012 Banks have indicated to the Finance Ministry that they can step up flow of funds to the infrastructure sector provided the banking regulator relaxes investment norms. To encourage investment in bonds issued by infrastructure companies, banks want the Reserve Bank of India to allow them to use these bonds for collateralised borrowing and lending. If allowed, banks can offer the bonds as security to borrow from counterparties (market repo) under the Clearing Corporation of India’s collateralised borrowing and lending platform in times of liquidity crunch. The counterparties, among others, will include banks, financial institutions, insurance companies, mutual funds, and provident/pension funds. Using infrastructure bonds as security for borrowing is one of the suggestions given by banks in response to feedback sought by the Ministry on whether the current investment policies were conducive. Banks have suggested that the RBI should allow them to classify investment in infrastructure bonds of three-five years maturity in the ‘held-to-maturity’ (HTM) category of investment classification. If allowed, they will not be required to make any provision for depreciation in value.

More riders for bank funding of road projects The Hindu Business Line, Aug 26, 2012 Bank funding for road projects may not come all that easy in the coming days. The Finance Ministry has come up with certain suggestions as part of its attempts to improve the risk management practices of the public sector banks (PSBs) as regards the roads sector. PSBs have now been asked to disburse loans only after NHAI (National Highways Authority of India) or State Governments have acquired 100 per cent ‘right-of-way’ for the road projects. The Finance Ministry has also suggested that promoters be asked to bring upfront at least 50 per cent of their contribution to the special purpose vehicles (SPVs). These recommendations came at a recent meeting convened by the Finance Ministry with senior management of PSBs, official sources said. Most road projects in the country are implemented through SPVs. A right-of-way is an area of land over which people and goods have the right to pass or travel. It describes the right to pass through land owned by someone else for a specific purpose.

Infra sector sees steep rise in CDR approvals The Financial Express, Aug 25, 2012 The infrastructure sector has seen a steep rise in the quantum of loans that have been approved by the corporate debt restructuring (CDR) cell since the end of the previous financial year. According to CDR cell data, five infrastructure companies received approval for the restructuring of loans worth R12,324 crore between March 2011 and June 2012. This took the outstanding amount of infrastructure sector debt restructured by the CDR cell as on June 2012 to R17,490 crore. Infra loans accounts for about 10.4% of overall debts that have been approved by the cell. Set up in 2002, CDR cell is a forum of bankers approved by the Reserve Bank of India to negotiate relaxed repayment terms with struggling borrowers. A senior State Bank of India (SBI) official said there have been a growing number of infrastructure cases coming up for restructuring in recent times. The myriad of clearances required for infrastructure projects and the highly leveraged nature of the sector are the main reasons for distress, the official said. Some of the infrastructure companies, whose loans have been approved for restructuring include Hindustan Construction Company (HCC), GTL Infra and Indu Projects.

Assocham moots Rs 10k-cr infrastructure fund for West Bengal The Hindu Business Line, Aug 13, 2012 Assocham has suggested forming a Rs 10,000-crore infrastructure development fund for West Bengal. It has also offered to prepare a detailed policy framework for realising the State’s growth potential. In a strategy paper for the State, the industry body said that to facilitate private investments and obtaining support from the Central Government for infrastructure development, the State needs to have a separate department. It further said the infrastructure fund be set up jointly by the State and the federal Government. Assocham felt the State urgently required creating clusters for the manufacturing sector. It added that the industry body was for “developing infrastructure in West Bengal for reducing the transaction costs of trade.” It said, “The State must develop minor ports on its coast and connect them to industrial corridors.”. West Bengal needs a maritime board as a a single-window agency for development of ports and inland waterways. “The board should form joint ventures with private investors to develop ports and SEZs in the port areas,” the paper suggested.

Cabinet note ready on tripartite pact for IDFs Financial Chronicle, Aug 01, 2012 Two funds have already been set up to refinance infra projects Finance ministry has readied a cabinet note for tripartite agreement to operationalise long pending infrastructure debt funds, the outgoing eonomic affairs secretary R Gopalan said. “The cabinet note is ready on tripartite agreement for IDFs. It will now go for inter-departmental consultation. After the consultations, it will go to cabinet for approval,” Gopalan said shortly before his retirement on July 31. A tripartite agreement is necessary for “securitisation” of the re-financing to be done by IDF. IDFs will buy up the loans provided by commercial banks to infrastructure projects. Banks that get short-term deposits find it difficult to lend to infrastructure projects with long gestation period as it leads to mismatch in their assets. Hence, IDFs will buy up loans to provide long-term lending to infrastructure projects. Two IDFs have already been set up to refinance infrastructure projects to boost long term funding. One IDF has been set up by ICICI led consortium of banks and another by IDBI-led consortium.

AVENDUS INFRASIGHT

Other Segments Big stink: Delhi needs to get its act together soon on waste Deccan Herald, Sep 22, 2012 According to Delhi-based environmentalists, the city produces nearly 10,000 metric tonnes of waste in a day, which is almost eight per cent of what India produces. Municipal Corporation of Delhi spokesperson Y S Mann says their estimates put the figure at nearly 7,000 tonnes. Either way, that’s a lot of rubbish. The unified MCD has 60,000 safai karamcharis for collecting waste. Waste management, which includes collection, segregation, treatment and recycling, is also done by New Delhi Municipal Council (NDMC), Delhi Cantonment Board and the city government. Other stakeholders include NGOs, resident welfare associations and private operators. But experts say waste is not a policy priority for the government. Drains remain choked in the colonies, and municipal waste is not collected and treated appropriately. “Waste management does not mean that you need to clean only the streets,” says Rajeev Betne, senior programme officer at Toxics Link, an environment NGO.

Bio-waste management projects to come up in J&K Business Standard, Sep 03, 2012 Jammu and Kashmir Government Chief Minister Omar Abdullah today approved setting up of two bio-medical waste management projects in Jammu and Srinagar, apart from incinerators facilities at four other districts. The Rs 7.40 crore-projects will cater to the disposal of waste products generated in hospitals within 150 km radius in the cities of Srinagar and Jammu, an official spokesperson said. The incinerators, proposed in the frontier districts of Leh, Kargil, Doda and Poonch, will treat waste products generated in health units situated in far off areas of Poonch, Rajouri, Doda, Kishtwar, Leh and Kargil. Addressing a meeting of officials, Omar stressed for early identification of feasible sites for establishment of such projects and asked the health department to formulate a team of officers from health, revenue and pollution control departments for the purpose. Terming bio-waste management as need of the hour, Omar underlined importance of proper and hygienic disposal of the waste generated in various health units and hospitals, and said it should be the thrust area for state's health and medical education department.

Govt plans to amend metro railway Act The Financial Express, Aug 30, 2012 The urban development ministry is planning to make amendments in the existing metro railway Act, 2009, to include the private public partnership model into the legislation and also to provide greater autonomy to states planning to create metro transit system in their cities. Presently, the PPP model doesn’t come under the ambit of the act. The first public private partnership in the metro transit system was between the Delhi Metro Rail Corporation (DMRC) and Reliance Infrastructure for the Airport Express line, which was shut down in July indefinitely for repair works, through a concessionaire agreement. After the shutdown of the airport line, the first PPP project built at a cost of R5,700 crore, the ministry has been pushing to incorporate the PPP Model into the act. However, former managing director of DMRC E Shreedharan has opposed to the PPP model in metro rail projects.

Fund constraints hampering rail projects: Minister The Hindu Business Line, Aug 24, 2012 The Indian Railways is not able to achieve the “desired level of progress due to limited availability of resources’’, Union Railway Minister Mukul Roy said at a Consultative Committee meeting of the Members of Parliament for the Ministry of Railways. The Minister also said that the available funds are “distributed over large number of projects’’. Noting that the Indian Railways is able to provide only about Rs 12,000 crore to new line and gauge conversion projects, Roy told the Members of Parliament that the Ministry of Railways has requested the various state governments to “share the cost of the projects falling in their respective states’’. Many states have come forward in this regard and at present 35 projects are under construction under such cost-sharing arrangement, he said. “Some remunerative projects are proposed to be executed through public-private partnership,” he said. The Ministry has also requested the Planning Commission to enhance the budgetary support for Railways.

Indian Railways, DFCCIL undecided on corridor autonomy Mint, Aug 16, 2012 Indian Railways and the Dedicated Freight Corridor Corp. of India Ltd (DFCCIL) can’t agree on how much autonomy the latter will have on the dedicated freight corridor (DFC). The railway wants the corridor under its control, while DFCCIL wants autonomy. The concession agreement between DFCCIL and Indian Railways is currently being studied by an inter-ministerial panel. DFCCIL is a subsidiary of Indian Railways established as a special purpose vehicle to construct the 3,278km-long corridors that received cabinet approval in 2006. The provisions of the concession agreement are being finalized and these won’t allow DFC to operate at arm’s length or provide for access to qualified rail users, said at least two senior government officials, both of whom didn’t want to be named. “In other words, the present stipulations will not allow the dedicated freight corridor to seek business from private parties,” said one of the officials. A concession agreement is typically a contract between the government and a company, permitting the latter to operate a particular business within the former’s jurisdiction.

Railways wants FDI for industry corridors The Indian Express, Aug 11, 2012 In a move that seeks to overturn the Railways’ policy against foreign direct investment in its core business of laying tracks and running trains, the Railways Ministry has proposed that the Cabinet allow FDI to build dedicated lines for industries. Accepting that its current plans to boost connectivity to sectors such as mining and industry have not succeeded, the ministry has forwarded its proposal for FDI in a cabinet note sent to the committee on infrastructure headed by Prime Minister Manmohan Singh. The note from Mukul Roy’s ministry comes at a time his Trinamool Congress party has been opposed to FDI in other sectors such as retail. Foreign direct investment in its core areas has been an absolute no-no for the fourth largest rail network in the world despite a huge shortage of funds to finance expansion. The Railways allows FDI only in the manufacture of components by private companies that supply to the network. Between 2000 and 2012, the total FDI into the Railways has been Rs 1,354.65 crore according to the Department of Industrial Policy and Promotion.

AVENDUS INFRASIGHT

World Infrastructure News

US eyes infrastructure market in India, other nations The Hindu Business Line, Sep 21, 2012 The US is looking to increase its share in the growing multi-trillion dollar infrastructure market in countries such as India, Indonesia, Columbia and the UAE. Global construction spending will grow from $6 trillion a year today to nearly $9 trillion a year by 2020, US Secretary of State Hillary Clinton said in her remarks to a one-of-its kind Global Infrastructure Conference organised by the State Department. The day-long meeting was attended by officials from Colombia, India, Indonesia and the UAE, besides US officials and industry representatives. “That growth represents enormous demand, both for traditional roads and bridges, and for the smart, technology-enabled infrastructure of tomorrow,” Clinton said. “The foreign Governments and foreign businesses represented in this room know exactly what I’m talking about. Because you are building cities for the next generation, and you need world-class partners to realise your ambitious plans. “And for all of you, this is a huge opportunity to connect with new customers and to help build the world of tomorrow,” she added.

High investment potential for US firms in Indian infra sector Financial Chronicle, Aug 30, 2012 India's ambitious $ 1 trillion investment target in infrastructure in the next five years offers immense opportunities for the US firms here, a top Indian diplomat has said. "Besides innovation and advanced technology, India’s priority to invest in modernising its infrastructure sector - over $ 1 trillion in the next five years, also opens opportunities for US firms in Houston to invest and harness opportunities for collaboration in this sector", Ambassador Arun Singh said. Singh, who is the Deputy Chief of Mission in the Indian Embassy in Washington, was speaking at an event under the banner "United In Excellence" organised by the Indo-American Chamber of Commerce Greater Houston (IACCGH) late last week. Most of this investment is expected to come through Public Private Partnerships, he said. "I would encourage the businesses in Houston not to miss the immense business potential inherent in India’s commitment to build its entire infrastructure," Singh said.

India, Thailand discuss connectivity, security issues and FTA The Economic Times, Aug 10, 2012 India and Thailand today took stock of ongoing measures to enhance connectivity and boost infrastructure between them, besides discussing security issues and status of negotiations on a bilateral FTA. "Thailand is an important interlocutor of India in the context of ASEAN and India's connectivity with Myanmar and other ASEAN countries," Indian Ambassador to Thailand Anil Wadhwa said after a day-long India-Thailand Foreign Office Consultations here. The Indian side at the talks was led by Sanjay Singh, Secretary (East), Ministry of External Affairs, while Sihasak Phuangketkeow, Permanent Secretary in the Thai Foreign Affairs Ministry, headed the Thai delegation. "The consultations were wide-ranging, held in a spirit of bonhomie, trust and mutually beneficial cooperation," Wadhwa said, adding the discussions were extremely useful from the point of view of tying up loose ends in India's relationship with Thailand, which is quickly moving towards a strategic partnership.

Will try to invest more in India: Belgian Deputy Prime Minister The Economic Times, Aug 07, 2012 Belgian deputy prime minister Didier Renders is in India to scout for opportunities to invest, especially in the infrastructure sector. In an interview with Amiti Sen, Renders talks about importance of a conducive investment climate, cooperation in retrieval of black money and need to ease taxation laws. The Minister mentioned that till now both countries have had a huge trade in diamonds, but Belgium is now trying to enhance investments in other sectors. They are already into some activities in infrastructure sector like ports and highways. And there are some investments in manufacturing too. But they will try to do more. Other countries (in Europe) have already expressed concern regarding GAAR but Belgium will keenly follow the process in Parliament. He mentioned that India is a huge democracy and there is always healthy discussion and that the country will implement a good regulation.

India seeks investments from Hongkong in infra sector Financial Chronicle, Aug 03, 2012 Inviting investments from Hongkong in its growing infrastructure space,including coal mining and energy, India today said the sector held great potential in areas such as safe environment. "India is making all efforts to boost up growth in energy sector. Modernisation and technology upgradation plans are in pipeline to achieve desired growth in coal production. Foreign investors can participate in these efforts," Coal Minister Sriprakash Jaiswal told investors here. Jaiswal, who is heading a delegation of senior officials including Coal India Chairman S Narsing Rao, was addressing investors here at a meet organised by Infrastructure Development Financial Corporation Ltd. He said investors were being provided a congenial environment for participating in infrastructure development under the public-private partnership route. "India needs about USD one trillion over the next five years for developing infrastructures and the government is well aware that such a huge investment is possible only when sentiments of the investors are taken care of," the minister said.

India, Germany to sign Rs 365 crore loan pact for urban infra. The Economic Times, Aug 01, 2012 India and Germany will sign an agreement tomorrow for Rs 365-crore loan facility to focus on urban infrastructure development in the state of Odisha. "The German government-owned development bank, KfW, will sign a loan agreement worth 50 million euro (about Rs 350 crore) and a Financing Agreement for project development and capacity building providing a grant of 2.5 million euro (about Rs 15 crore) with the Government of India in Bhubaneswar on August 2, 2012," the German Embassy said in a statement. The agreement will enable the state government to boost urban service delivery in the towns of Odisha in a manner that is both financially and environmentally sustainable, it said. The pact will be signed by Department of Economic Affairs Joint Secretary, Prabodh Saxena, and Director KfW office in India Oskar von Maltzan, in the presence of Odisha Chief Minister Naveen Patnaik. To manage the growing urbanisation of the state in a planned manner, the Odisha government is creating a dedicated institutional framework for urban financing that will support municipal infrastructure development by combining financing with technical assistance and capacity building.

AVENDUS INFRASIGHT

AVENDUS POWER INDEX The Avendus Power Index is the first index designed to indicate the performance of major listed Power Generation companies in India. While there are a plethora of indices which track the performance of Energy/Power sector in India, we felt the need to create a separate index for the power generation companies.

Key Highlights

Returns Summary (ending June 22, 2012) Avendus Power Index NSE Nifty BSE Sensex

1 month 10.62% 5.90% 5.38%

3 month 3.61% 9.72% 9.35%

6 month (0.15%) 8.75% 8.51%

1 year (2.09%) 12.64% 11.27%

2 year (35.96%) (6.30%) (7.59%)

YTD 15.86% 22.17% 20.22%

Methodology

The index is free float market capitalization weighted and comprises the following stocks- Adani Power, CESC, GMR Infra, GVK Power, Indiabulls Power, Jaiprakash Power, JSW Energy, KSK Energy, Lanco Infratech, NHPC, NTPC, Reliance Power, Tata Power and Torrent Power. The index begins with a value of 1000 on January 01, 2006 with only CESC, Jaiprakash Power, NTPC and Tata Power. As and when more Power Generation Companies have got listed, we have added them to the index after making appropriate adjustments. The index has also been adjusted for various corporate actions. We have used free float market capitalization data till September 28, 2012 for this edition of the newsletter.

1,500

1,750

2,000

2,250

2,500

2,750

3,000

Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12

Avendus Power Index

AVENDUS INFRASIGHT

ABBREVIATIONS Term Description

BOT Build-operate-transfer

CAGR Cumulative Annual Growth Rate

CYxx Calendar Year ending 31-Dec-20xx

DGCA Directorate General of Civil Aviation

EBITDA Earnings before Interest, Tax, Depreciation and Amortization

EPC Equipment, Procurement & Construction

EV Enterprise Value

FYxx Financial Year ending 31-Mar-20xx

IPO Initial Public Offering

JV Joint Venture

MCap Market Capitalization

PE Private Equity

NW Net Worth

Term Description

O&M Operation & Maintenance

P/B Price to Book Ratio

P/E Price to Earnings Ratio (Earnings is represented by PAT)

PAT Profit After Tax

PPP Public Private Partnership

NHAI National Highway Authority of India

NHDP National Highway Development Program

USA United States of America

UK United Kingdom

PWD Public Works Department

YoY Year on Year

Yr Year

YTD Year-To-Date for the Calendar Year

AVENDUS INFRASIGHT

ABOUT AVENDUS

Avendus Capital is a leading financial services firm which provides customized solutions in the areas of financial advisory, equity capital markets, alternative asset management and wealth management. Avendus Securities through its Institutional Equities practice is able to offer clients best-in-class research-driven advice to help them take investment decisions, while Avendus PE Investment Advisors manages funds raised from its investors by investing in public markets and private equity. The Group relies on its extensive track record, in-depth domain understanding and knowledge of the economic and regulatory environment, to offer research based solutions to its clients that include institutional investors, corporates and high net worth families. Avendus Capital has consistently been ranked among the top-five corporate finance advisors in India and has emerged as the advisor of choice for cross-border M&A deals and has closed 40 cross-border transactions in the past 4 years. Headquartered in Mumbai, the firm has offices in New Delhi and Bangalore. Avendus Capital, Inc (US) and Avendus Capital (UK) Pvt. Ltd. located in New York and London, respectively, are wholly owned subsidiaries offering M&A and Private Equity syndication services to clients in the respective regions.

For more information, please visit www.avendus.com

CONTACT DETAILS

Navneet Singh [email protected]

Prateek Jhawar [email protected]

Akhil Dokania [email protected]

Abhishek Srivastav [email protected]

Debashish Sadangi [email protected]

OUR OFFICES

Avendus Capital Pvt. Ltd.

Mumbai: IL&FS Financial Centre, 5th Floor, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051 Tel: +91 22 6648 0050

New Delhi: Suite 22A/B, The Aman Resort, Lodhi Road, New Delhi - 110003, Tel: +91 11 45357500

Bangalore: The Millenia Tower, A-10th Floor, No. 1 & 2 Murphy Road, Ulsoor, Bangalore 560 008 Tel: +91 80 6648 3600

Avendus Capital, Inc (Subsidiary)

New York: 499 Park Avenue, 12th Floor, New York, NY 10022, Tel: +1 646 707 0789

Avendus Capital (UK) Pvt. Ltd. (Subsidiary)

London: 33 St James's Square, London SW1Y 4JS, Tel: +44 203 159 4353

(Avendus Capital, Inc and Avendus Capital (UK) Private Limited are authorized and regulated by the FINRA and FSA respectively)

“© Copyright 2011 Avendus Capital Private Limited. All rights reserved.”

http://www.avendus.com/

mailto:[email protected]




avendus infrasight

Documents