Infrastructure sector abuzz with activities
Post the Modinomics wave, the ailing infrastructure sector is reviving. The infrastructure sector, which saw acquisition and fund-raising deals in the last three months after a three-year lull, is getting ready for a boost. It is poised for a flurry of deals that will revive stranded projects and help the sector to bounce back in 2015.
The sector which has been struggling for years due to the slowdown in government’s decision making, issues over land acquisition and environment, poor financial health of private sector developers, lower GDP and spending power of the nation, lack of market sentiment, job cuts and lack of job generation due to which prospective buyers did not have money to invest etc. is suddenly abuzz with activity.
Last month, Reliance Power agreed to buy the hydroelectricity portfolio of Jaiprakash Group for about Rs 12,000 crore. Over the past three months, companies such as Jaiprakash Associates, GMR Infrastructure and J Kumar Infrastructure have together raised Rs 5,000 crore through qualified institutional placement (QIP), or share sale to qualified institutional buyers (QIBs).
Experts and industry players expect infrastructure companies to raise Rs 8,000-10,000 crore more through QIPs, initial public offering (IPO) and other equity sale. Now with the introduction of REITs and InvITs in the real estate sector, that sector is expected to see a boost soon.
The experts also believe more deals in the renewable energy, thermal power and road sectors are in the pipeline as highly leveraged companies have been looking to sell stake in projects.
Source- The Economic Times
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