Singapore’s sovereign wealth fund GIC will join hands with Jaipur-based smart meter manufacturer to invest $2 billion for projects, amid renewed investor interest in the sector.
The Indian power sector has been impacted by delayed repayment cycles leading to mounting debt amid other regulatory concerns. But the situation seems to be changing, with several private equity players eyeing a vast potential in the smart meter manufacturing space.
GIC will hold about 74% stake and Genus Power will own the remaining 26%, the two companies said in a statement on Tuesday. GIC will invest in projects through its affiliate Gem View Investment Pte Ltd.
Further, GIC, through another affiliate Chiswick Investment Pte Ltd, will invest about Rs 519 crore into Genus through stock warrants, representing about 15% stake in the smart meter manufacturer. VCCircle first reported in May that Genus was in discussions with a clutch of investors including GIC for a funding round.
Highlighting rising interest in this space, earlier this year, the government said it is implementing smart metering projects nationally, under the new Revamped Distribution Sector Scheme (RDSS), with a planned installation of 250 million meters and $30 billion in investments by 2025.
“GIC’s investment attests to the prospects of the smart metering space, our manufacturing prowess and execution track record,” said Jitendra Kumar Agarwal, joint managing director, Genus Power.
Genus, started in 1995, is one of the primary players to support the government’s initiative of widespread installation of smart meters across India. Under the Advanced Metering Infrastructure Service Provider (AMISP) scheme, Genus has been recently awarded close to 4 million meters and is currently pursuing an active pipeline of projects.
The company has its own in-house R&D team with manufacturing facilities across Jaipur, Haridwar and Guwahati, with a total installed capacity of over 10 million meters. It also has an engineering, construction and contracts division (ECC) division to complement the existing meters business.
“We believe smart meters will play a crucial role in India’s journey towards improving power sector efficiency,” said Ang Eng Seng, chief investment officer of infrastructure at GIC.
“India remains a key long-term market for GIC given its economic fundamentals and favourable demographics, which are spurring opportunities in many sectors including infrastructure development.”
Some other PE players interested in this space in India include, I Squared Capital, Ontario Municipal Employees Retirement System (Omers), OTPP, Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Brookfield, Macquarie, Canada Pension Plan Investment Board (CPPIB), VCCircle had reported previously.
In February, I Squared Capital said it took a controlling stake in Jaipur-based smart metering firm Gram Power, a wholly owned unit of Singapore’s Polaris Smart Metering Pte Ltd. In April, VCCircle reported that Omers is considering creating an investment platform by joining hands with EDF India Pvt. Ltd, the Indian unit of French state-run power utility Électricité de France SA (EDF).
The World Bank’s private sector investment arm, the International Finance Corporation (IFC) is also in the fray. In May, VCCircle reported that the investor could provide as much as $500 million to companies engaged in rollout of smart meters across the country.