An alternative investment fund set up by the Edelweiss group is acquiring two annuity road assets from Hyderabad-based Navayuga Group for approximately $150 million, two people aware of the development said.
The Edelweiss Infrastructure Yield Plus fund (EIYPF), which was formed to invest in operating roads, renewables and power transmission assets, plans to raise a corpus of up to $1 billion.
The fund last year made a first close of around ₹2,000 crore, raised largely from domestic investors, and has been looking for investment opportunities since then.
“The two road assets that Edelweiss is acquiring are based in the state of Assam and are collectively valued at close to $150 million. Both the assets are annuity roads and have been operational since the last two years," said the first of the two persons cited above, both whom spoke under condition of anonymity.
Emails sent to Edelweiss and Navayuga Group remained unanswered.
The acquisition of the Navayuga roads marks the second investment by the Edelweiss infra fund.
Last week, Mint reported that the Subhash Chandra-led Essel group has sold the two transmission assets owned by Essel Infraprojects, Darbhanga-Motihari Transmission Ltd and NRSS XXXI (B) Transmission Ltd, to the same fund.
Essel had entered into an agreement to sell the two assets to Sekura Energy Ltd, a company owned by Edelweiss Infrastructure Yield Plus Fund, in October 2018. The agreement also gave Edelweiss the right to purchase two other transmission assets owned by Essel—Warora-Kurnool Transmission Ltd and NRSS XXXVI Transmission Ltd, which are expected to be commissioned this financial year.
The Indian roads sector has seen a flurry of merger and acquisition activity in the recent months, with several developers seeking buyers.
In May, Mint had reported that Essel Infraprojects has agreed to sell three of its road projects to Caisse de dépôt et placement du Québec, Canada’s second-largest fund manager. These assets are expected to have a combined enterprise value of ₹3,300-3,500 crore. The three projects comprise toll roads in Madhya Pradesh, Karnataka and Telangana.
Infrastructure fund manager Global Infrastructure Partners (GIP), too, is seeking buyers for its road portfolio—Highway Concessions One. In April, Mint reported that Canadian pension funds, Canada Pension Plan Investment Board (CPPIB) and CDPQ, and the Piramal Group have entered the final round of bidding to acquire Highway Concessions One.
GIP’s road assets, totaling 472 route km, have been valued at between ₹4,000 crore and ₹4,250 crore ($600 million) by the bidders, Mint reported. The HC1 portfolio, comprising seven road assets—five toll roads and two annuity roads, is spread across seven states.
In March, Cube Highways and Infrastructure, the Indian roads and highways platform of global infrastructure fund I Squared Capital, announced that it has agreed to acquire DA Toll Road Pvt. Ltd, which operates a toll road in the states of Haryana and Uttar Pradesh, from Reliance Infrastructure Ltd.
The road was valued at an enterprise value ₹3,600 crore. DA Toll Road operates the 180-km, six-lane Delhi-Agra highway (NH2).
Another road developer, Sadbhav Infrastructure Project Ltd, has put up 12 operating road assets on sale.
In March, The Economic Times reported that CPPIB, through an infrastructure investment trust floated by L&T Infrastructure Development Projects Ltd, is in advanced talks to acquire the assets for $400-500 million.