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Business News/ Companies / Welspun Enterprises in talks to sell road asset in MP to IDFC
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Welspun Enterprises in talks to sell road asset in MP to IDFC

Welspun Enterprises holds a 50% stake in the 142.6km Dewas-Bhopal road project, while the balance is held by Chetak Enterprises, a highways developer

Welspun Enterprises, which operates 500km of completed BOT road projects, builds highways, urban and water infrastructure, and residential and commercial projects.Premium
Welspun Enterprises, which operates 500km of completed BOT road projects, builds highways, urban and water infrastructure, and residential and commercial projects.

Mumbai: Welspun Enterprises Ltd, an infrastructure company, is in advanced discussions to sell its Dewas-Bhopal Corridor project in Madhya Pradesh to investment manager IDFC Alternatives, said two people with knowledge of the matter.

Welspun Enterprises holds 50% stake in the 142.6km Dewas-Bhopal road project, while the balance is held by Chetak Enterprises Ltd, a highways developer.

The four-lane project was completed in April 2010 at a cost of 630 crore. It is one of the biggest of the six build, operate and transfer (BOT) projects in Welpsun Enterprises’ portfolio.

In BOT projects, a private operator builds the project from its own funds, operates it for a period and then transfers it to the government.

Welspun Enterprises was looking to monetize the asset to grow its capital, said one of the people cited above. Both declined to be named.

Many large infrastructure companies are looking to sell their road assets after a change in rules made it easier for BOT developers to exit operational projects. Infrastructure firm Madhucon Infra Ltd in October agreed to sell one of its road assets to Cube Highways and Infrastructure Pte Ltd of Singapore for 248 crore. In August, Gammon Infrastructure Projects Ltd sold six road and three power projects to BIF India Holdings Pte Ltd for 563 crore.

IDFC Alternatives is in discussions with several infrastructure firms to buy their operational assets, said Aditya Aggarwal, managing director, infrastructure fund. He refused to comment on the Dewas-Bhopal deal.

IDFC Alternatives, whose investors include global pension funds and sovereign wealth funds, intends to invest 4,000 crore in infrastructure projects across power, roads, ports and airports over 18-24 months, Mint reported on 14 September.

Mint could not immediately ascertain if Chetak Enterprises had agreed to sell its stake in the Dewas-Bhopal project.

An email sent to Welspun Enterprises on Thursday remained unanswered despite subsequent follow-ups. Managing director Sandeep Garg could not be reached for comment. Chetak Enterprises could not be reached for comment.

In 2014, the $3 billion Welspun Group decided to merge three of its units—Welspun Infratech Ltd, Welspun Plastics Pvt. Ltd and Welspun Infra Projects Pvt. Ltd—with Welspun Projects Ltd to simplify its corporate structure and leverage the strengths of a combined balance sheet. The new merged entity, called Welspun Projects, was subsequently named Welspun Enterprises.

Welspun Enterprises, which operates 500km of completed BOT road projects, builds highways, urban and water infrastructure, and residential and commercial projects. Last year, the firm said it would sell its non-core direct reduced iron business Welspun Maxsteel Ltd to JSW Steel Ltd for 1,000 crore.

Welspun Enterprises had a standalone debt of 87.42 crore on 30 September and a consolidated debt of 430.57 crore on 31 March, said Bloomberg.

Till Friday’s close, the company’s shares had risen 73.55% in the past 12 months, while the benchmark Sensex fell 10.24%.

Apart from IDFC Alternatives, I Squared Capital, Australia’s Macquarie Group and Canadian pension funds are the other active investors in the Indian infrastructure sector.

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Published: 05 Dec 2015, 01:04 AM IST
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