Abraaj Capital inaugurates India Fund with acquisition of strategic stake in Ramky Infrastructure Ltd.
Abraaj Capital and Sabre Capital, through their recently formed joint venture Sabre Abraaj, announced today the acquisition of a strategic stake in Ramky Infrastructure Limited (Ramky), part of the Ramky Group, a rapidly growing infrastructure construction and development firm based in Hyderabad, India.
This acquisition marks the first investment by the recently launched US$300 million Sabre Abraaj India Private Equity Fund I Limited. The Fund seeks to take majority or strategic minority stakes in both listed and unlisted Indian companies.
Ramky has a growing contracting business in the construction of roads, highways, industrial buildings, housing, irrigation canals, water supply and drainage systems. The company has also invested in an industrial park and housing development projects on a Build-Operate-Transfer (BOT) basis in partnership with the Indian government. Ramky will use the new capital in order to take on larger construction projects and make additional investments in BOT projects.
Arif Naqvi, Vice Chairman and Chief Executive Officer of Abraaj Capital and Chairman of the Sabre Abraaj Investment Committee, said: “Some investors see the nations of the Middle East, North Africa and South Asia (MENASA) as separated by geography, demographics and economic fundamentals. We see something quite different: a single region linked by the promise of growth and opportunity. Sabre Abraaj – as an entity and through its investments – is testimony to the possibilities for such economic cooperation across the MENASA region.”
Rana Talwar, Chairman of Sabre Capital and Sabre Abraaj, said: “Our intention is to support those entrepreneurs and businesses that are realising the potential of this dynamic era in India. It is fitting, then, that the fund’s first acquisition is an investment in literally building a better India. Sabre Abraaj, through acquisitions such as Ramky, is investing in a stronger India for tomorrow.”
Ayodhya Rami Reddy, Chairman, Ramky Group, said: “We are very pleased to have Sabre Abraaj as our valued investor. We believe they are the right partner to help us expand and achieve the enormous growth that the industry has to offer by providing us access to capital, best-in-class governance standards and assistance in our growth strategy.”
Infrastructure construction and development in India is today clearly poised for increasing growth. In 2005, infrastructure investment in the country stood at US$24 billion and is predicted to roughly double, to US$47 billion, by 2009. According to analysts, if India is to remain on its current growth path, infrastructure spending must reach US$100 billion by the end of the decade. The country’s construction industry, including firms such as Ramky, will be among the beneficiaries of such investment.
Jonathan Hall, Senior Vice President, Abraaj Capital, said: “Ramky is a progressive, fast-growing company at the forefront of a very exciting industry that we believe has enormous growth potential. This acquisition marks Sabre Abraaj’s entry into a key sector in one of the world’s most dynamic economies.”