Ajay Piramal, Chairman of Piramal Enterprises, is optimistic about the potential of the country’s infrastructure sector. Flush with funds and in search of investment opportunities, the Piramal Group plans to offer debt financing for key infrastructure projects in the country, says the Chairman.

“We are clearly looking to invest in companies that will give us the returns we want. We do understand real estate, for one, and have been investing in projects through our non-banking financial company (NBFC),” Piramal told Business Line .

In its bid to cash in on the infrastructure sector which offers multiple opportunities, the group is looking to provide debt financing for key projects, he added.

On Thursday, Piramal Enterprises had announced its decision to pick up a 20 per cent stake in Chennai-based Shriram Capital for ₹2,014 crore. Last week, Piramal had exited Vodafone India, raking in ₹8,900 crore. The company is slated to get another ₹2,000 crore later this year, as the last tranche of payment for its 2010 deal with Abbot Laboratories.

CPPIB deal “We have been driving debt deals through the NBFC. All investments are clearly only on debt. Take, for instance, our deal with the Canada Pension Plan Investment Board (CPPIB), where we are providing debt financing to build real estate across the country,” said Piramal.

The CPPIB, one of Canada's biggest pension funds, invests money to pay benefits to its 18 million current and retired contributors. At $192.8 billion, the CPPIB fund is the largest single purpose pool of capital in Canada. In February, Piramal Enterprises formed a strategic alliance with CPPIB to set up a $500-million real estate finance company in India.

“India is the next logical step for them (CPPIB). They were looking to find an experienced partner with a strong track record. They were looking for long-term partners who they could align with. They wanted something multi-generation,” Piramal said.

Stating that the Piramal Group wholeheartedly believes in partnership, the Chairman added: “Partnerships should grow for both parties. They (CPPIB) bring the same values that we have.”

On its part, the CPPIB has been keen to participate in India’s burgeoning realty sector. “It (realty) has demonstrated compelling fundamentals, which the CPPIB could not ignore. They are very bullish about the India story. Why should we not be?”

The CPPIB did its first investment in India’s real estate sector in November 2013, committing $200 million to own 80 per cent of a venture with Indian infrastructure firm Shapoorji Pallonji Group. The duo has formed a fund for investments in the country’s real estate sector.

“There is no question of a one-upmanship with them (Shapoorji Pallonji), for, they are into infrastructure for years. We are only interested in debt. With CPPIB, we will have an aligned pool of capital and can target compelling financing opportunities,” he added.

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