3i Invests $161 Million in Indian Port

HONG KONG (Reuters) – British private equity firm 3i Group Plc (III.L) said on Tuesday that an infrastructure fund under its management had invested $161 million in a stake in India’s Krishnapatnam Port Company Ltd (KPCL).

The fund, 3i India Infrastructure Fund, managed by 3i Group, has taken a minority stake in the deep-water port in the Indian state of Andhra Pradesh, 3i said in an emailed statement that had no further financial details.

Krishnapatnam Port Company Ltd has been offered a 30-year concession, extendable to 50 years, to develop and run the Krishnapatnam port, which was established in July and is expected to handle about 100 million tonnes (mt) of bulk cargo annually when completed, according to the 3i statement.

India’s port industry is expected to see robust expansion in the coming years, driven by growing international trade and capacity constraints at existing ports, analysts have said.

India’s port sector needs to attract around $20 billion of investment to support fast growth of trade services over the next five years, the government has said.

London-listed 3i Infrastructure Plc (3IN.L) is a limited partner in the $1.2 billion 3i India Infrastructure Fund, with a $250 million commitment.

On Monday, ratings agency Standard & Poor’s downgraded 3i to ‘BBB+’ from ‘A-‘, pushing the group’s shares down 7.1 percent. S&P cited concern over the tough operating environment for private equity firms and 3i’s liquidity and financial flexibility.

(Reporting by George Chen, Editing by Muralikumar Anantharaman))