UK-based private equity firm Actis has acquired a portfolio of four operational highway assets from Indian infra developer Patel Infrastructure Ltd for an undisclosed sum.
The projects – out of which two acquisitions have been completed and the other two are in the process of being acquired – are of the hybrid annuity model (HAM), Actis said in a release.
To be sure, the National Highways Authority of India (NHAI) pays 40% of the total project expenditure under the HAM model.
It was reported in May last year that two of the four assets, which were operational back then, could fetch an enterprise value of Rs 1,500 crore
While Actis did not comment on the actual details of the portfolio, it has been reported earlier that these include a 48.8 km section of NH-12 in Rajasthan and a 31 km section of Vadodara Kim Expressway.
The other two roads reportedly are a 50.48 km stretch on NH-45C in Tamil Nadu and another 47.83 km stretch of NH-45C.
Offering a rationale for the acquisition, Actis said that the assets “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,” the private equity major said further.
"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 - long-life infrastructure at Actis.
This development comes less than a month after Actis made a move to monetise a portfolio of six road assets it had earlier acquired.
It had sealed the roads deal for an enterprise value of $775 million, or about Rs 6,000 crore at the time, marking its biggest India transaction, as it tweaked its strategy to strike bigger bets in the country.
Last month, the PE firm announced that it had created an infrastructure investment trust (InvIT), which houses the six assets. The InvIT, named the NXT-Infra Trust, has filed draft documents with India’s capital markets regulator SEBI to raise Rs 1,900 crore (about $229 million) by selling units to institutional investors and corporate bodies.
The InvIT intends to use the proceeds to give a loan of Rs 1,736.88 ($209 million) to the special purpose vehicles (SPVs) that operate the six assets. The SPVs will use that loan to redeem the optionally convertible debentures issued to Actis.
Apart from the roads sector, Actis remains heavily invested in India's renewable energy sector, having floated and sold two big platforms—Sprng Energy and Ostro Energy. It now owns BluPine Energy, its third green energy platform in India. BluPine itself acquired a 404 MW portfolio of solar assets in 2022 as part of its growth strategy.
The emerging markets-focussed PE firm had stitched at least four transactions in India during 2022 across the real estate, renewable energy and highways sectors. These included a warehousing joint venture with Mahindra Lifespaces, acquiring Rx Propellant, and buying six highway assets from Welspun Group.