Infrastructure – Ameliorating India the “T-E-C” way

In last year’s budget speech, the Indian Finance Minister coined the acronym ‘TEC India’ – “Transform, Energise and Clean’ India. With this vision in the background, there is renewed impetus on developing key infrastructure.

The renewable energy sector continues to witness consolidation, rather than becoming quite active. Hinduja is picking up stake in Fonroche & Kiran Energy, IDFC’s acquisition of assets from Punj Lloyd and Jindal steel are a few key inflexion points in the renewable energy sector with domestic firms being the prime movers. More recently Leap Green taking over Inox Renewables 200 MW portfolios and induction of China Light Power as a strategic partner by Suzlon Energy, and merger of Orient Green Power and IL&FS Wind Energy are other examples.

Macquarie has already consolidated more than 300 MW on its platform We also see some big-ticket transactions by leading players including Renew & Greenko both of which are actively seeking assets to add to their increasing portfolio.

• Greenko set to buy Orange Renewables for $1 Bn
• Renew bought the Solar & Wind assets of Ostro Energy, the renewable platform for Actis, deal value of around $1.63 billion
• SB Energy, the India energy arm of Softbank Group is becoming quite aggressive and has announced to invest $60-100 billion in solar power generation.
It also joined hands with Chinese company GCL System Integration Technology for a solar power venture in India worth almost $1 Bn. At the same time, it has also tied up with IL&FS to jointly develop more than 20 gigawatts of solar power.

Though the industry had seen considerable hikes in compensation till a few years back, things are now stabilized. Companies are calling the shots, with better availability of quality talent, especially in Project Management, Engineering & Business Development. However, with rapidly changing scale and size CXO layer needs to be strengthened.

Power Transmission is the other sector witnessing a potential for buyers who are looking for investments in this space with support from global investors. Players like IndiGrid and Adani Transmission are looking to grow and not just in India but even markets such as Latin America and MEA. Being a highly regulated industry, senior talent adept at understanding and managing regulatory matters is in high demand, especially for emerging international territories.

Within Smart Cities, major share of projects are taken by Environment, Transportation, Housing – Affordable and mass and Technology Infrastructure. With all these sectors speeding up, we see continued demand for Structural Engineering Experts, Senior Urban Planners, Waste Water Experts, Data Scientists etc.

Metro Rail, is an emerging sector and continues to require quality talent. Apart from Project management, efficient operations are coming more into focus with quite a few international players already managing some of the large Indian projects, including Hyderabad, Mumbai etc. While quality talent from Railways to some extent fills the need, we will be requiring senior leaders for managing the Operations.

Roads sector continues to draw interest from international players. Italian road operator Atlantia is in talks with IRB to acquire its operational road assets portfolio in a $2 Bn deal. Abu Dhabi Investment Authority is buying a minority stake for about Rs 2,000 crores in Cube Highways & Infrastructure, that owns and operates over 1,700 lanekm of highways in India. Demand for senior leadership talent for Tolling, O&M and Regulatory is high with significantly more investments expected into the sector. Peak Infrastructure is closing on the new acquisitions.

NIIF, India’s first sovereign wealth fund, and DP World launched the platform to invest up to $3Bn in ports, terminals, transportation and logistics in India. The Asian Infrastructure Investment Bank also plans to invest $200Mn in the fund. Adani Ports has bought Kattupalli Port from L&T and plans to convert the same into a multi-commodity facility.