KKR to acquire 60% stake in Ramky Enviro for $530 million
The stake purchase by KKR in Ramky Enviro Engineers is the largest buyout by a private equity firm in India’s environmental services sector
Mumbai: Private equity firm KKR and Co. on Sunday said that it will acquire a 60% stake in environmental solution provider Ramky Enviro Engineers Ltd (REEL) for $530 million. This is the largest buyout by a private equity firm in India’s environmental services sector. The acquisition will be done through a combination of primary and secondary investments from KKR’s Asian Fund III.
Hyderabad-based REEL’s offerings of environment management services include collection, transport and processing of hazardous, municipal, biomedical and e-waste, as well as recycling of paper, plastic and chemicals.
In India, the company is present in 60 locations across 20 Indian states. It has also expanded its presence in markets including Singapore, Oman and the United Arab Emirates.
REEL operates the country’s largest waste-to-energy plant in Delhi with a power generating capacity of 24 megawatts (MW) by converting 1,500 tonnes of waste every day. Its other waste-to-energy plants are located in Hyderabad, Nasik, Koyambedu and Rewa. The company handles 3.5 million tonnes of municipal waste, one million tonnes of industrial waste, and caters to 20,000 healthcare establishments.
Commenting on the development, Sanjay Nayar, member and chief executive of KKR India, said, “We are excited to partner with REEL, the only comprehensive environmental management company offering end-to-end environmental and waste management services across India. REEL’s work uniquely supports the Swachh Bharat Mission, and our team is pleased to invest in the growth of a company that provides critical services and infrastructure to reduce pollution and address the needs of India’s expanding urban population.”
As on 30 June, KKR’s assets under management stood at a little over $191 billion.
The investment firm manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through its strategic partners, hedge funds.
“We look forward to leveraging our resources to enhance REEL’s operational best practices and add value by focusing on engineering innovation, attracting managerial talent and boosting efficiency, in addition to building on REEL’s rigorous focus on environmental, health and safety initiatives,” said Rupen Jhaveri, managing director at KKR in India.
According to a 2016 report on Confederation of Indian Industry website, the total market for environmental goods and services in India stood at $10 billion and the sector growth is projected to grow 10% annually.
In the past four years, the sector has got a boost from the Swachh Bharat Abhiyaan, one of the flagship missions of the Narendra Modi government. The central government has allocated ₹17,843 crore for the mission in the current fiscal year.
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