New wave of foreign investments improve the face of Indian Infrastructure Projects
India seems to be the new investment hub for foreign investors. Engineering major Larsen & Toubro on Monday told the media that the Canada Pension Plan Investment Board (CPPIB) had agreed to invest over Rs 2,000 crore in its infrastructure arm, L&T Infrastructure Development Projects (L&T IDPL) which will help the company to complete on-going projects.
These kind of investments are new to India and the Group Chief Financial Officer of L & T Mr. R Shankar Raman stated that this is the first direct private investment by a Canadian pension fund in a domestic infra development company.
This investment will happen in two phases. In the first phase CPPIB’s wholly owned subsidiary CPP Investment Board Singaporean Holdings 1 (CPPIBSH) will make an initial investment of Rs 1,000 crore in L&T Infrastructure Development Projects (L&T IDPL). And then in the second phase after 12 months of the initial investment, another Rs 1,000 crore, or a higher amount will be invested by CPPIB.
CPPIB will have a direct interest in the growth of L & T IDPL as the investment board will buy preference shares of L&T IDPL, and hence if the share prices rise, it will be beneficial for CPPIB. These shares will be compulsorily convertible into equity shares by 2018 at a mutually agreed price. After conversion, the CPPIBSH will hold a minority stake in L&T Infrastructure.
Source- The Financial Express
Larsen & Toubro (L&T), Larsen & Toubro construction, Larsen & Toubro Housing Finance, Larsen and Toubro Ltd, projects by Larsen & Toubro
