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    Case Study 2

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    rabi_kungle
    IDFC and its subsidiaries worked together to help Ashoka Buildcon win and finance two highway projects in India. IDFC Capital structured the debt and syndicated financing during the financial crisis. IDFC Project Equity acquired a 43.3% stake in each project. IDFC Private Equity also holds a 15.62% stake in Ashoka Buildcon, allowing the projects to begin despite challenges raising funds during the global recession.

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    Case Study 2

    Uploaded by

    rabi_kungle
    58 views2 pages
    IDFC and its subsidiaries worked together to help Ashoka Buildcon win and finance two highway projects in India. IDFC Capital structured the debt and syndicated financing during the financial crisis. IDFC Project Equity acquired a 43.3% stake in each project. IDFC Private Equity also holds a 15.62% stake in Ashoka Buildcon, allowing the projects to begin despite challenges raising funds during the global recession.

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    IDFC and its subsidiaries worked together to help Ashoka Buildcon win and finance two highway projects in India. IDFC Capital structured the debt and syndicated financing during the financial crisis. IDFC Project Equity acquired a 43.3% stake in each project. IDFC Private Equity also holds a 15.62% stake in Ashoka Buildcon, allowing the projects to begin despite challenges raising funds during the global recession.

    Copyright:

    © All Rights Reserved
    58 views2 pages

    Case Study 2

    Uploaded by

    rabi_kungle
    IDFC and its subsidiaries worked together to help Ashoka Buildcon win and finance two highway projects in India. IDFC Capital structured the debt and syndicated financing during the financial crisis. IDFC Project Equity acquired a 43.3% stake in each project. IDFC Private Equity also holds a 15.62% stake in Ashoka Buildcon, allowing the projects to begin despite challenges raising funds during the global recession.

    Copyright:

    © All Rights Reserved
    of 2

    BUILDING TRUST

    Four IDFC businesses tied up with infrastructure company Ashoka


    Buildcon, to win and finance two highway projects

    The case:
    Ashoka Buildcon Ltd. (ABL) is an emerging infrastructure company that builds highways and
    roads across India. As part of its business, ABL tied up with IDFC to bid for two contiguous
    national highway projects on NH-6 in Chhattisgarh and Maharashtra.

    The National Highways Authority of India (NHAI) awarded both the projects to the ABL-IDFC
    consortium. The combined project cost of the projects was Rs. 1115 crore of which Rs. 320 crore
    was to be funded by equity, Rs. 785 crore through debt and Rs. 10 crore through an NHAI grant.
    IDFC held a 10% equity stake in each project.

    The challenge:
    The consortium won the bid around the same time that the global financial meltdown began. As
    a result, one of the key challenges faced by them was raising the equity in a market that had
    turned over-cautious. At this time it seemed like an uphill task to solicit proposals from equity
    investors to take equity stakes in the projects. Structuring and syndicating the debt portion of
    the Rs. 1,115 crore needed for the project was another challenge.

    IDFC’s ‘one firm’ solution:


    Setting up an example of how IDFC’s different businesses work as one whenever the
    opportunity arises, IDFC took the lead in structuring the debt and IDFC-Capital successfully
    syndicated the debt for the projects during the peak of the financial crisis in 2008-2009. IDFC-

    www.idfc.com
    Capital also assisted ABL in soliciting proposals from equity investors to take equity stakes in the
    projects. The India Infrastructure Fund (IIF), managed by IDFC Project Equity, offered the most
    competitive terms to ABL and acquired a 43.3% stake in each project. IDFC Private Equity also
    holds a 15.62% stake in ABL.

    As a result of this joint effort by IDFC, IDFC Capital, IDFC Project Equity and IDFC Private Equity,
    ABL was able to begin working on a capital intensive project right in the middle of a global
    recession and implement it successfully.

    How it worked at IDFC


     IDFC: lead in structuring debt
     IDFC Capital: Debt syndication and soliciting proposals from equity investors
     IDFC Project Equity: Acquired stake in each of the two projects on competitive terms
     IDFC Private Equity: Holds stake in ABL

    © 2010, Infrastructure Development Finance Company Limited. All Rights Reserved

    FORWARD LOOKING STATEMENTS: This case study is neither an offer nor solicitation to buy or sell any
    securities mentioned and is for educational purposes only. While it is believed all sources of information
    are factual and reliable, in no way is it represented or guaranteed that the description or statements
    herein are accurate and complete. The reader should verify all claims and do his/her/their own due
    diligence before investing in any securities mentioned. Any forward-looking statements involve risks and
    uncertainties. IDFC does not undertake any obligation to update any forward looking statement, except as
    required under applicable law. This work may not be used, sold, transferred, adapted, abridged, copied or
    reproduced in whole on or in part in any manner or form or in any media without the prior written
    consent of IDFC.

    All product names and company names and logos mentioned herein are the trademarks or registered
    trademarks of their respective owners.

    www.idfc.com

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