India’s quasi-sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF), has emerged as the buyer of the hybrid annuity road assets of Ashoka Concessions Ltd for an equity value of around $100 million, said two people aware of the development on condition of anonymity.
Ashoka Concessions’ roads portfolio comprises 15 projects, including six operational toll assets under the build, operate, transfer (BOT) model, one operational BOT annuity project and eight under-construction hybrid annuity projects.
The proposed deal with NIIF is only for the hybrid annuity model (HAM) assets. EY is running the sales process for the highways infrastructure company.
Mint had reported that NIIF, Canada’s Brookfield Asset Management Inc. and Actis Llp had placed bids to buy Ashoka Concessions’ assets, in a potential deal that may have an equity value of around $350 million and an enterprise value of around $1.2 billion. The sale process for Ashoka Concessions has been in the works for a while. I Squared Capital-owned Cube Highways had also earlier shown interest in the road assets.
“NIIF is expected to acquire the HAM assets. This has been agreed upon and the sales purchase agreement (SPA) is expected to be signed shortly,” said one of the two people mentioned above.
With $4.5 billion of equity capital commitments across its three funds, NIIF’s road projects platform in India with Canada’s Public Sector Pension Investment Board’s (PSP Investments) ROADIS plans to invest $2 billion in equity to acquire road assets in India.
“As per NIIF policy, we do not comment on market speculation and information gathered from third-party sources,’’ said an external spokesperson for NIIF in an emailed response. “As per our policy, we do not comment on market rumours or speculation,” a PSP Investments spokesperson said in an emailed response.
Ashoka Buildcon Ltd has a 61% stake in Ashoka Concessions, while the remaining 39% is held by Macquarie Infrastructure and Real Assets (MIRA), one of the biggest foreign infrastructure investors in India. In 2012, Macquarie, through its first India-focused fund, had bought the stake for ₹800 crores. It had finalized the deal jointly with State Bank of India.
When contacted, spokespersons for Brookfield, Macquarie and EY declined to comment. Queries emailed to spokespersons of Ashoka Buildcon and Actis on Friday remained unanswered till press time.
The development comes at a time when passenger and commercial vehicle traffic has been on a rise significantly since covid-led restrictions were lifted. However, there are concerns over the second wave of coronavirus infections, with some states imposing curbs such as night curfews to contain the transmission of the virus, which in turn may derail the recovery.
The road transport and highways ministry had built 13,505km of national highways, or 37km per day, in FY21.
The government expects private investments of ₹30,000 crore in 2021-22 under the HAM and BOT models.