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Icelandic Bank Encouraging Midland Firms To Woo India
Icelandic investment bank Kaupthing hopes to woo India and take advantage of India’s expanding middle class and increased urbanization and industrialization, which has led to the rise in value of infrastructure assets in the emerging market. It has listed an Indian infrastructure fund on the London Stock Exchange’s AIM market and is hoping the move will boost UK investment in its former colony. The initiative comes as the West Midlands looks to make the most of growing contacts in India.
Kaupthing Singer & Friedlander managing director Trevor Foster said: “This is an opportunity for discerning West Midlands investors to enter one of the fastest growing economies in the world. “We hope it will attract those in the region of Indian origin but also interest business people who can see there are excellent returns to be made by taking a global outlook.” KS&F Midlands chairman Paul Bassi added: “The West Midlands is increasingly seeing great advantages in developing business links with India. With on-going business and political initiatives taking place, the timing is right for this infrastructure fund to take off.”
The Kaupthing fund has raised £40 million in equity and bought three assets: a hydroelectric power plant, a toll road and a rail freight siding. The aim is to develop a 400MW unit situated in Maheshwar, in the southwestern region of Madhya Pradesh. It is approaching the final stages of construction and is expected to begin operations next year. Birmingham City Council is preparing to send a delegation to India early in 2009.It will be led by council leader Mike Whitby and follows the recent visit by a Confederation of Indian Industries team to Birmingham and the West Midlands. And recently an action plan to forge new business and academic ties between the West Midlands and India was launched by West Midlands Minister Liam Byrne. The aim is to establish an India Co-ordination Group later this autumn to unlock potential multi-million pound trade and investment opportunities.
The Kaupthing fund will be advised by Bridge Capital Realty, a Singapore-based advisory and Asset Company that specializes in logistics and property in India. Infrastructure India is headquartered in the Isle of Man and, in particular, is focused on the energy and transport sectors. Its chairman is Rupert Cottrell while investment advisers are Bloomsbury Asset Management.
It is aiming at an internal rate of return of 15 per cent a year, rising to 25 per cent. The hydroelectric power plant project has seen the fund take a stake in Shree Maheshwar Hydel Power Corporation. The fund’s pipeline of potential opportunities includes renewable and conventional power stations, roads and airports. Mr Cottrell added: “The growth prospects for India provide a compelling rationale for investment in the Indian infrastructure sector at this time. We are delighted in the interest that has been shown.”
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