Anuj Ranjan, Brookfield Asset Management
If Canadian investment firm Brookfield Asset Management buys out Reliance Jio’s tower business, it will be its third biggest deal this year, after the $1.87-billion East West pipeline pact and the Rs 3,950-crore one to acquire five assets of Hotel Leela.
Investment bankers estimate Jio’s 170,000 telecom towers to be currently valued at Rs 36,000 crore ($5 billion). This may increase to $7 billion after it ramps up the network to 260,000 towers.
After focusing on real estate in the initial years, Brookfield now seems to be focusing more on infrastructure and other businesses.
It has also invested in roads and renewables assets. Till date, it invested around $10 billion. This deal could take the tally to $14 billion, making it one of the largest private equity investors in India.
According to a report in The Economic Times, the tower assets are likely to generate returns of 12-13 per cent based on the tenancy lease assumptions – Jio is the main tenant. Besides Brookfield, Reliance Industries (RIL) chairman Mukesh Ambani is also likely to invest in his personal capacity in the deal, to be held in an investment trust. Regulations require at least five non-sponsor investors or unit holders for privately-placed investment trusts.
Brookfield appears to be on a deal-making spree in India. In March, an investment trust led by Brookfield bought RIL’s East West Pipeline for Rs 13,000 crore ($1.87 billion). In the same month, it announced a Rs 3,950-crore deal to acquire five assets of Hotel Leela Venture.