Axis Private Equity Limited, (AXIS PE), a company set up by Axis Bank to manage private equity funds today announced two significant investments of Rs. 75 Crore (USD 19 Mn) and 67 crores (USD 17 Mn) in Neesa Leisure Limited (Neesa Leisure) and Corrtech International Private Limited (“Corrtech”) respectively. These investments further reaffirm Axis PE’s commitment to invest in companies involved in infrastructure development of the nation i.e. hospitality, railways, development of oil and gas pipelines, water supply and sanitation.

This comes close after Axis PE announced investment of Rs 120 Crore (USD 30 Mn) in Harish Chandra (India) Ltd. earlier this month
“We are very pleased to announce the closure of these investments. Both these investments fall in line with our vision and mission of investing in high growth potential sectors. We have been actively exploring investment opportunities in the oil and gas infrastructure space and believe that Corrtech has immense potential to be a key player in the oil and gas pipeline business. We are happy to partner with Corrtech and contribute to the growth of the Company,” says Mr. Alok Gupta, MD & CEO, Axis PE

Further, commenting on the hospitality space Mr. Gupta said, “There is huge demand-supply gap. There are close to 110,000 hotel rooms across all categories in India, a very low figure when compared to other countries like China which has over a million rooms and USA, which has over four million. It is estimated that India needs another 125,000 rooms by 2010 to meet the surging demand. We believe Neesa Leisure will be a key player in the hospitality sector and we are happy to partner and support the Company in its exciting growth phase.”

Neesa Leisure develops and operates resorts and hotels under the “Cambay” brand name. The Company manages 3 properties currently and plans to have 8 properties in the next three years spread over 5 cities in western India. The room inventory is set to increase 5 fold to around 1000 rooms in the same period.

Mr. Sanjay Gupta, Chairman, Neesa Leisure, speaking on the occasion, said, “It is a matter of great pride and happiness for Neesa Leisure that Axis PE has chosen it for investment. The Company will draw on the strong expertise of Axis PE in strategic and financial matters to successfully grow the business many-fold in the next couple of years.”

Within the hotels’ space, Neesa Leisure is focusing on providing quality training and conference venues to corporates. The Company has a strong strategy in place to expand across western India and become a dominant player in the meeting, convention, incentive and events (MICE) segment.

Corrtech, based in Ahmedabad, is involved in a number of high growth business segments linked to oil and gas transportation infrastructure and repairs and services of gas turbines.

Corrtech controls more than 30% of the market share in providing corrosion protection solutions with primary focus on oil and gas pipelines. Over the past few years, the Company diversified its activities into laying oil and gas pipelines, gas turbine maintenance, installation of gas skids and building city gas distribution networks. The Company has recorded revenues of more than 150 crores (USD 37 mn) for FY’08 having grown at more than 90% annually in the last two years.

The estimated market size for Corrtech in the target sectors is around INR 22,500 Cr (USD 56 Bn). Key customers like GAIL, Reliance Industries and GSPL have in the past stated that they anticipate a shortage of contractors for laying of pipelines and are keen that companies like Corrtech scale up and develop capability to handle larger projects. The investment made by Axis PE will be utilized by the Company to purchase equipments for scaling up the capability for executing larger oil and gas pipeline projects.

Commenting on the occasion of the landmark transaction, Mr. Amit Mittal, MD, Corrtech, said, “We are glad that Axis PE has chosen to invest in our Company and look forward to receiving strategic inputs from the firm. The investment will nurture future growth and enable the Company to rapidly scale up its business.”

Sourced From: Hanmer / MS&L Communications Pvt Ltd

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