Actis, the UK based investor in sustainable infrastructure, will acquire a portfolio of operational and under-construction Hybrid Annuity Model (HAM) road assets from Patel Infrastructure Limited (PIL). Actis has completed the acquisition of two operational assets and is in the process to acquire an additional two assets upon completion, stated a company release.
The deal has an enterprise value of Rs 1,500 crore ($180 mn) with an equity value of Rs800-900 crore, said sources. However, the company has not disclosed the value of the transaction.
The assets, awarded by the National Highways Authority of India (NHAI), are highly attractive given the availability-based fixed revenues with interest rate indexation features. Given the scalable and attractive opportunity set in India, the roads sector is expected to be one of the key pillars of the firm’s investment strategy in the country, with several other transactions in the pipeline, added the release.
ET first reported about the potential deal on May 5, 2023.
The operational assets include a 48.8 km section of NH-12 (Darah-Jhalawar-Teendhar Section) in Rajasthan, a 31-km section of Eight Lane Vadodara Kim Expressway, and a 50.48 km stretch on NH-45C in Tamil Nadu and another 47.83 km stretch of NH-45C, the under-construction projects.
In 2022, Actis Long Life Infrastructure Fund acquired six operating road assets from Welspun Enterprises for an enterprise valuation of approximately Rs 6,025 crore ($775 mn).
“The acquisition of these NHAI HAM concessions expands our footprint in India, a market where we see huge potential in both the energy and infrastructure sectors,” said Adrian Mucalov, Partner and Head of Long-Life Infrastructure at Actis. We invest in critical infrastructure in growth markets where governments look to foreign investment to meet that infrastructure demand. Investing in transport systems such as toll roads can lead to more efficient road usage, improved road safety, reduced car idling and pollution, and lead to quicker journeys with lower emissions while increasing connectivity and growth potential, he added.
Ernst & Young acted as the exclusive financial advisor to Actis on the transaction and Standard Chartered Bank acted as the exclusive financial advisor to PIL.
Actis is one among the contenders to acquire the build-operate-transfer (BOT) toll road assets of Ashoka Concessions, subsidiary of Highway builder Ashoka Buildcon, for an enterprise value of about Rs4500 crore, ET reported in December. Indian Highway Concessions Trust, the infrastructure trust of Canada’s CDPQ is the other contender for the assets.
