Highways Infrastructure Trust, an infrastructure investment trust (InvIT) owned by KKR, has acquired four road assets from Macquarie India in a deal worth ₹3,000 crore.
Earlier, Adani Road Transport had agreed to acquire these road assets for ₹3,100 crore, but terminated the deal last month citing “unsatisfactory conditions”.
Highways Infrastructure Trust (HIT) will acquire Gujarat Road & Infrastructure (GRICL) and Swarna Tollway (STPL), the InvIT said in a filing with stock exchanges. GRICL and STPL own two toll roads each.
Macquarie Asia Infrastructure Fund owns a 56.8% stake in GRICL, while IL&FS holds 26.8% and the balance stake is with the Gujarat government.
GRICL’s toll roads are in Gujarat. The Ahmedabad to Mehsana stretch on SH-41 spans 51.6 kms. The second road asset of 31.7 kms from Vadodara to Halol on SH-87 is on the Delhi-Mumbai Industrial Corridor.
STPL’s assets are in Andhra Pradesh – 110 kms from Tada to Nellore on NH-16 connecting ports such as Chennai and Krishnapatnam and the 48-km Nandigama-Ibrahimpatnam-Vijayawada stretch on NH-65, which provides feeder traffic to NH16.
KKR, the sponsor of HIT, held an 89.99% stake in the InvIT as on March 31, 2023. Canada’s Ontario Teachers’ Pension Plan holds a 7.51% stake and the rest is owned by other institutional and non-institutional shareholders.
HIT is likely to win a 316-km-long highway asset under the ToT 12 auction by the National Highways Authority of India as the highest bidder with an offer of ₹4,181 crore, ET reported last week. Only one road stretch, from Lalitpur to Lakhnadon on NH26 in Madhya Pradesh, comes under the 12th bundle of roads to be offered under the toll-operate-transfer deal.
Currently, the InvIT’s portfolio comprises six road assets with a total length of more than 450 kms in Rajasthan, Gujarat, Madhya Pradesh, Meghalaya, Tamil Nadu and Telangana. Recently, HIT acquired the Navayuga Udupi Tollway, which manages a 90-km stretch of NH 66 in Karnataka.
In May, HIT acquired four projects under the hybrid annuity model from HG Infra Engineering, aggregating to 100 kms, in Haryana.
Once these deals are completed, HIT will have a portfolio of about 15 roads, aggregating about 1,000 kms.
According to a report by ratings firm ICRA, a 16-21% increase in road execution activity is expected in FY24 at 12,000-12,500 km, in the backdrop of a healthy pipeline of projects, increased capital outlay by the government and focus on project completions ahead of general elections.
ICRA projects toll collections to grow 6-9% in FY2024, primarily supported by a 4-5% increase in traffic.
