State Bank of India's investment banking arm SBI Capital Markets (SBICAP) and Piramal Enterprises (PEL) have signed a memorandum of understanding (MOU) to cooperate on business related opportunities in acquiring controlling stakes in road PPP assets.
The two companies are interested in road PPP assets where many developers are looking at selling their completed or near completion assets to repair their balance sheets.
SBICAP and PEL have mutually agreed to engage on a preferred relationship basis for advisory services for such identified road assets. SBICAP would also assist PEL in obtaining necessary approvals for closing such transactions.
Mr. Parvez Umrigar, Co-Head - Structured Investment Group, Piramal Enterprises stated:
We have already been in the mezzanine financing space; we saw opportunity in buyout of road assets. In the past two years, at least 70-80 per cent of closures in infrastructure projects have been led by SBI Capital Markets.
SBICAP is the largest investment banker having strong relationships with infrastructure developers and enjoying highest level of confidence within the banking industry. Piramal considers road sector as an important area of investment and we believe that our partnership with SBICAP is a step towards achieving this objective.
According to sources, PEL and SBI Capital are already working on certain projects and term sheets have been signed with some of the listed players in the road space.
Piramal Enterprises, through Piramal Fund Management, provides comprehensive financing solutions to real estate companies. Its Structured Investments Group provides mezzanine funding to corporates in various sectors, including infrastructure.
SBI Capital Markets Ltd. (SBICAP) is India's largest domestic Investment Bank.