Investors seeking to buy stakes in Rs24,500 crore of highway projects: India Ratings

The list of potential sellers include companies like HCC Concessions, NCC Infrastructure, Soma Enterprises Ltd, Reliance Infrastructure and GMR Infrastructure


India Ratings estimates that the highway sector has witnessed transactions of around Rs111 billion in debt, during February 2013-June 2016.
India Ratings estimates that the highway sector has witnessed transactions of around Rs111 billion in debt, during February 2013-June 2016.

New Delhi: Credit rating agency India Ratings and Research Pvt. Ltd said on Tuesday that investors are looking to pick up stakes in highway projects worth Rs.24,500 crore.

These are completed highways with an average six years of operational history, said India Ratings, which sees a paradigm shift in acquisitions from developers to financial investors.

“The activity pipeline has been abuzz in the last three years and Ind-Ra estimates that the highway sector has witnessed transactions of around Rs.111 billion (Rs.11,100 crore) in debt, during February 2013-June 2016,” it said in a statement.

The rating agency said the list of potential sellers include companies like HCC Concessions Ltd, NCC Infrastructure Ltd, Soma Enterprises Ltd, Reliance Infrastructure Ltd and GMR Infrastructure Ltd.

Global marque funds and investors such as I Squared Capital, Brookfield Asset Management, PSP Investments and Macquarie’s India Infrastructure Fund, among others, have picked up stakes or are in advanced stages of acquisition of around 2,900 kms of national and state highway projects, the rating agency said.

Similarly, domestic financial investors such as IDFC India Infrastructure Fund and other infrastructure companies such as Tata Realty and Infrastructure Ltd have shown interest in around 780 km of highways.

“Road projects worth over Rs.400 billion (Rs.40,000 crore), spanning around 3,600 kms, have either been sold off in the last three years or are currently in the process of being divested. This recent increase in investor appetite could well be sustained, with reports doing the rounds that the government is working towards clearing the roads to provide access for global sovereign wealth funds to invest into private highway projects,” the statement said.

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