Mumbai, April 30 (WNW staff) - Major global investors, including some of the largest pension and sovereign wealth funds, are in initial discussions with Reliance IndustriesNSE -0.50% to invest in two infrastructure investment funds (InvITs) established to own Reliance Jio Infocomm's Tower and Fiber Optic facilities.
People familiar with the situation told the Economic Times that the Canadian pension funds CPPIB, Ontario Municipal Employees' Retirement System (OMERS), British Columbia Pension Corporation (BCPC), Middle East Sovereign Wealth Funds were among the participants in the talks.
It is planned to employ at least five shareholders or investors in accordance with the statutory provisions. Some potential investors such as ADIA, Brookfield, CPPIB may also come on board as co-sponsors by using larger cheques.
The Fiber Unit is valued at $23.84 billion (Rs 1,66,880 Crore) and the Tower at $5.27 billion (Rs 36,890 Crore) using fair market valuations from three independent appraisers.
"We were surprised at the scale of the $18 billion tower and fiber separation, the largest volume of any telecommunications provider in India," said Nikhil Bhandari, an analyst at Goldman Sachs. "We expect investment intensity in telecommunications to decrease significantly in fiscal 2020 as tower and fiber capacity is separated and 99% of the population is supplied.
CPPIB, OMERS and Brookfield refused to comment. Allianz refused to comment on individual assets and said that as a long-term investor it would like to benefit from the continuous growth potential of the Indian economy and contribute to it through attractive investments.
OMERS Infrastructure announced only a few months ago that the fund had acquired a 22.4% stake in the IndInfravit Trust ("IndInfravit") for a total purchase price of INR 8.7 billion (C$ 160 million).
IndInfravit holds a portfolio of five operating toll road concessions originally built and operated by L&T Infrastructure Development Projects Limited ("L&T IDPL"), a subsidiary of Larsen & Toubro Limited ("L&T"). The five roads lead some of the most economically dynamic states in the Republic of India and support the country's growing economy. IndInfravit is a platform well positioned to play a key role in the future through additional investments in India's road infrastructure.