I Squared Cap to invest $300 million in telecom infra platform Lightstorm

NEW DELHI: New York-based I Squared Capital plans to invest around $300 million in Lightstorm Telecom Ventures, its telecom infrastructure platform in India.

The investment by I Squared Capital comes in the backdrop of its sale of Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers, to Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd or Petronas, for ₹2,700 crore.

“Lightstorm is 100% owned by I Squared Capital and they have ambitious plans around this telecom infrastructure platform," said a person aware of I Squared Capital’s investment strategy in India.

I Squared Capital plans to acquire optical fibre networks to set up a carrier-neutral telecom infrastructure platform, according to a person aware of the development.

Queries emailed to I Squared Capital founder Gautam Bhandari, managing director Andreas Moon, and India head Harsh Agrawal on 25 June remained unanswered.

The infrastructure-focused private equity firm has over $13 billion of assets under management. It focuses on energy, utilities and transport in North America, Europe and high-growth economies. In India, I Squared Capital has so far set up two platforms—Cube Highways, a roads and highways platform; and the recently-divested Amplus Energy Solutions. Cube Highways was set up along with International Finance Corp. (IFC).

Indian telecom firms have been experimenting with monetizing their optical fibre assets. Also, the telecom department plans to monetize fibre assets built by the government under its flagship mission BharatNet through outright sale to private players or by leasing them for 20 years through a bidding process.

The Telecom Regulatory Authority of India (Trai) is also in favour of new business models.

“Issues related to fiberization and infrastructure creation. How do we ensure that fixed line broadband penetration increases in the country, fiberization increases in the country. Can we ensure new business models which can create fibre-only players so that they can provide fibre to other entities on non-discriminatory basis," said Trai chairman R.S. Sharma after a December meeting with telcos to decide on the agenda for this year.

I Squared Capital’s focus on setting up a carrier-neutral telecom infrastructure platform comes against the backdrop of the National Democratic Alliance government’s focus on fibre network in its National Digital Communications Policy-2018, which aims to attract $100 billion in investments in digital communications.

“I Squared Capital is focusing on India given the growth opportunities here. It has made a very successful exit in Amplus Energy Solutions," said the person cited above.

While I Squared held over a 90% stake in Amplus, the balance was held by the management team led by Amplus founder and chief executive officer Sanjeev Aggarwal. Mint had reported about the impending deal on 16 January about the firm that has 500 megawatts under operation and development at 200 locations across India, West Asia and South East Asia.

I Squared Capital invested $150 million in Amplus in April 2015 and helped it to grow to become India’s largest rooftop solar power producer by over 400% annually before selling its stake. The firm has offices in New York, Houston, London, New Delhi, Hong Kong and Singapore.

Mint had reported on 4 December about I Squared Capital creating a new renewable assets platform that will acquire and develop utility-scale projects. I Squared Capital, which last year closed a $7-billion global infrastructure fund is also in the process of setting up its credit business in India. In April 2015, it had announced the final close of its first infrastructure fund, ISQ Global Infrastructure Fund, at $3 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.