It has been reported that the Indian government plans to split GAIL India’s transmission business into a separate entity that it could sell to strategic investors. GAIL currently owns more than 70 per cent of the country’s 16,800 km pipeline network.
Macquarie Infrastructure and Real Assets (MIRA) said oil prices will push Indian state-owned firms to sell some assets, and suggested that, as the world’s biggest infrastructure investor, it is poised to capitalise on this.
Suresh Goyal who heads MIRA in India and Southeast Asia, said in an interview: “There is a fair bit of opportunity for the government to divest non-core oil and gas assets, like oil storage facilities, pipelines, transmission facilities. With our investment platforms, local teams, we are well placed on capitalising this opportunity.”
MIRA raised approximately $61 billion in capital globally last year – the highest in the world based on data from Infrastructure Investor – and has poured $2.5 billion into India over the last ten years.
Canada’s Brookfield Asset Management acquired Reliance Industries Ltd.’s East West Pipeline last year via an infrastructure investment trust for 130 billion rupees ($1.7 billion). Now, the government plans to split GAIL India’s transmission business into a separate entity that it could sell to strategic investors.
Deepak Mahurkar, leader, India oil and gas industry practice, at PricewaterhouseCoopers LLP, said: “India’s energy consumption is likely to grow 60-70 per cent in the next decade and a half, leading to a significant jump in petroleum products and gas consumption. This is an important story for investors, especially the global private equity firms and infrastructure asset managers.”
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