SIMIC

Peter Shaw-Smith | Jun 30, 2022

The NIIF is to invest $300m for a shareholding of 22.5% in Hindustan Ports Private Limited (HPPL), a wholly-owned DP World subsidiary. Set to be the Fund's largest investment, NIIF’s contribution under the partnership will reach $500m. The transaction is expected to close in the first quarter of 2023.

HPPL is one of India’s leading container terminal platforms with a track record of long-term growth. The entity operates five container terminals, managing more than 5m teu of capacity and representing a national market share of over 20%. The terminals are in strategic growth locations, including Mumbai, Mundra, Chennai and Cochin, a NIFF statement said.

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The two partners also set up Hindustan Infralog Private Limited (HIPL) in 2018. Since then, HIPL has invested in rail logistics, multi-modal logistics parks, container freight stations, economic zones, cold-chain infrastructure and contract logistics to create an integrated logistics platform.

They believe HIPL and HPPL are both well placed to benefit from significant growth opportunities across Indian ports and logistics. Capital raised through the transaction is expected to spur new infrastructure development, supply chain efficiencies and future HPPL growth initiatives. Improved cargo connectivity should also deliver cost efficiencies and improve the customer’s experience.

Related: DP World global container volumes up 1.7% in first quarter

“Since the beginning of this partnership with NIIF, we have made significant progress in building an inland logistics infrastructure network of great scale that complements our container ports platform,” Sultan Ahmed Bin Sulayem, group chairman and ceo, DP World, said.

“Notably, the opportunity landscape in India remains significant and this transaction will allow us to accelerate investment across ports and logistics to drive returns for our respective stakeholders.”

Sujoy Bose, md and ceo, National Investment and Infrastructure Fund Limited, said the deepening of the four-year partnership with DP World underlined the attractive opportunities in the Indian ports and logistics sector and the strategic vision and ongoing reforms under the PM Gati Shakti programme.

“The investment will enable NIIF’s domestic and international investors to have a meaningful exposure in the sector through a unique and scalable platform with a significant presence across sea-based container terminals and land-based container logistics infrastructure,” he added.

While DP World has enjoyed some success in India, its goal of overcoming the primacy of Colombo as regional transhipmnent hub has yet to bear fruit.