Largest Foreign direct investment in India: Investment Trust Deal with Essar Oil $12.9 bn deal

Foreign direct investment
Foreign direct investment

In India, Investors, invested Largest Foreign direct investment in 2016.

In the single largest tranche of foreign concord in the midst of investment in India, a $12.9 billion conformity (Rs 86,100 crore) was inked regarding October 12 for sale of 98% in Essar Oil to Rosneft and investment consortium led by Trafigura.

The Transaction is the single largest tranche of foreign talk to investment in India, and in the region of-establishes the image of India as an handsome destination for foreign investments. Earlier in 2007, Essar Group, together considering Hutchison Whampoa, brought Vodafone into India through an $11.1-billion transaction. With the current Transaction, this is the second instance that Essar has brought in world leaders in the sector to participate in the India parentage gloss.


Essar Group Chairman, Shashi Ruia said it was a historic hours of daylight for Essar. The transaction demonstrates our unique aptitude to construct world-class assets and make huge value in our businesses. The monetisation of our stake in Essar Oil will message objective the taking into account level of accumulate for our subsidiary businesses, he supplementary.

The transaction, that was announced in the presence Prime Minister, Narendra Modi and Vladimir Putin, President of the Russian Federation, at the BRICS Summit in Goa (India), includes Rs 72,800 crore ($10.9 bn) for Essar Oils refining and retail assets and Rs 13,300 crore ($2 bn) for Vadinar dock and merged infrastructure.

The Essar-Rosneft Transaction
·         Largest single tranche of inbound foreign direct investment
·         Transaction pegs Essar Oil’s enterprise value at Rs 72,800 crore ($10.9 billion) plus an additional Rs 13,300 crore ($2 billion) to be paid for Vadinar Port
·         Essar Global Fund decided to monetise Essar Oil, one of its key assets, after Rosneft and many other overseas firms evinced a keen interest in picking up a stake in the company
·         Rosneft, the Russian government owned integrated oil company, has picked up a 49% stake in Essar Oil Limited
·         Consortium of Trafigura and UCP pick up another 49% stake
·         All-cash deal expected to close in Q1 2017, subject to all necessary approvals
·         Essar plans to utilise proceeds from the stake sale to deleverage the Group and pave the way for strategic consolidation and growth in other businesses
·         There is no non-compete fee under the transaction with Rosneft
·         Deal in line with government’s vision to attract high ticket foreign investments into India
·         Transaction includes 20 MTPA refinery at Vadinar (Gujarat) and all supporting infrastructure
·         Deal demonstrates the ability of Indian businesses to attract overseas investment and indicates foreign players’ belief in the India growth story
·         Transaction also gives Rosneft and the UCP-Trafigura consortium access to Essar Oil’s pan-India network of over 2,700 fuel retail outlets
·         Deal will help Essar deleverage almost 50% of its Rs 88,000 crore debt and substantially reduce interest costs
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