Best Time To Launch Infrastructure Investment Funds, Says Sterlite Power’s Prateek Agarwal
Sterlite Power's Chief Executive Officer Prateek Agarwal is betting on real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) to bring in a large chunk of foreign capital to fulfill the country's infrastructure needs.
"I think that (of) the $600 billion investment that India needs, a large chunk will come through global financial institutions, through tax efficient instruments like REITs and InvITS,”Agarwal said in an interview to Bloomberg Quint at the India Economic Summit 2016 organised by the World Economic Forum in New Delhi, India.
According to Agarwal, there are "hundreds of millions of dollars" lying in negative yields around the world, which can come to India and finance infrastructure through the InvIT route and REIT route.
Sterlite Power, which is now the second largest private power transmission company after Adani's acquisition of Reliance Infrastructure's transmission business, is looking to make the most of market regulator SEBI’s relaxed norms and launch its own InvIT by the end of this financial year.
India's Power Transmission Needs
Agarwal said India needs at least 3-4 private companies to fulfil the power transmission roll out needed in the country and bridge the gap between its capacity and peak load.
There is a lot of catching up that needs to be done. Every year India needs $10 billion investment in power transmission between the centre and the states. And that is an incredibly large capex.Prateek Agarwal, CEO, Sterlite Power
He called the consolidation of Reliance Infrastructure's transmission business with Adani Transmission a “phenomenal move”, adding that more companies should look at a similar consolidation strategy.
Every company should remain focused in what their core business is and should divest assets like in most countries. 4-5 players control power transmission (the world over) that is the way that it will be in India as well.Prateek Agarwal, CEO, Sterlite Power