Private equity major KKR has launched its third infrastructure investment trust (InvIT) named Highways Infrastructure Trust (HIT), in addition to Virescent Renewable Energy Trust, a renewable energy InvIT, and India Grid Trust, a transmissions InvIT.
Together, these platforms operate and manage 33 assets valued at over $3.8 billion across 22 states or union territories across India.
In addition, HIT is considering a pipeline of acquisition targets, including through sponsors. The platform possesses significant growth potential and seeks to invest in high-quality assets, including through bolt-on acquisitions, KKR said in a press statement.
Currently, the InvIT’s initial portfolio comprises six road assets with a total length of more than 450 kilometres across six states in India. The assets, which include a diversified mix of toll and annuity roads, are located in Gujarat, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu and Telangana.
The firm has launched the current vehicle to cater to the demand and expand India’s road network, which is the second-largest globally, as passenger and commercial vehicle traffic continues to increase. India’s road network is responsible for 90% of total passenger traffic and the movement of almost 65% of all goods across the country, it said.
Last year, KKR signed a definitive agreement to acquire Global Infrastructure Partners’ (GIP) entire interest in Highway Concessions One (HC1). HC1 manages and operates seven road assets in India. It currently operates a portfolio of national and state highway assets with a total length of 487 kilometres across seven states: Gujarat, Karnataka, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu and Telangana.
Since setting up its Mumbai office in 2009, KKR has made more than 20 investments in India with more than a dozen active portfolio companies, the firm noted.
“HIT’s launch is a significant milestone for KKR’s India infrastructure strategy as we deepen our presence in the market. Highways and roads play a critical role in driving India’s economic prosperity and connecting its citizens, and we look forward to enabling further infrastructure creation and expansion as transportation demands continue to grow,” said Hardik Shah, Partner, KKR.
He added, “With our dedicated platforms across transmissions, roads, and renewables in place, KKR is well-positioned to collaborate with sellers in the private markets and the government through the National Monetisation Pipeline on attractive investment opportunities.”
In August, India Grid Trust (IndiGrid) fully acquired a power transmission firm, Raichur Sholapur Transmission Pvt. Ltd for up to Rs 250 crore in one or more tranches.
IndiGrid purchased 100% of Raichur Sholapur Transmission from its existing investors - Patel Engineering (33.4%), Simplex Infrastructures (33.33%) and BS Ltd (33.33%).
In December 2020, IndiGrid agreed to fully acquire two solar assets operated by FRV Solar Holdings located in Andhra Pradesh. In the previous month that year, it said it would acquire a 74% stake in Parbati Koldam Transmission Co Ltd from Anil Ambani group’s Reliance Infrastructure Ltd.