If the recent private equity dealflow in the engineering, procurement and construction (EPC) sector is any indication, Hyderabad is the EPC capital of India. In a latest deal, private equity firms Fidelity International and Seqouia Capital India have bought about 20 per cent equity in Hyderabad-based Coastal Projects, an EPC firm, for Rs 160 crore. Coastal will use the proceeds to build its portfolio of hydropower BOOT projects and to purchase construction equipment.
Coastal was founded in 1995. The company is executing border fencing work on both eastern and western borders of India. The company has offices at Hyderabad, Delhi, Bangalore, Chennai and Colombo and work sites are located across the country. It recently executed a project in Bhutan. The company plans to take up power and other infrastructure projects in Sri Lanka and Far East Asian countries.
Some of the recent deals in EPC sectors are are Hyderabad-based EPC firm Engineering and Construction Company (ECI) raising Rs 100 crore ($25 million) from Sabre Abraaj India Private Equity Fund I (Sabre Abraaj), a fund managed by Sabre Capital. Also, the city based engineering and construction company Totem Infrastructure raised Rs 30 crore from Singapore-based private equity fund Aquarius Investment Advisors Pte Ltd. Recently, a leading Asian private equity firm invested in a mid-sized Hyderabad based EPC firm, and now the trend is to pick up stakes in smaller EPC companies.
Last year saw several large deals like Nagarjuna Constructions raising $150 million from Blackstone, Ramky Infrastrcuture raising $31 million from IL&FS Investment Managers and Sabre Abraaj Private Equity, and Soma Enterprise $101 million from 3i Group.