Mumbai: Kotak Alternate Asset Managers Ltd (Kotak Alts) has realised a twofold return on its investment in HKR Roadways Ltd, earning ₹1,650 crore from the sale of the road developer to Cube Highways and Infrastructure V Pte. Ltd, the companies said in a statement on Wednesday.
The realised amount reflects returns made through distributions and the final exit transaction over a five-year period, transforming a stressed infrastructure company into a high-quality operating asset.
Strategic corridor
HKR Roadways is a special purpose vehicle operating a 206 km four-lane state highway project in Telangana under a build-operate-transfer toll concession running until February 2041. This included three toll plazas on a critical corridor within Telangana that connects the state to Chhattisgarh, Maharashtra and other northern states.
Commissioned in 2014, the project, however, faced delays, lower-than-expected traffic volumes and sizeable pending capital expenditure. These factors caused stress in repaying debt, resulting in it being classified as a non-performing asset.
Following a one-time settlement with the original lender consortium and recognising the underlying value of the infrastructure asset, Kotak Alts acquired a majority stake in HKR Roadways from Gayatri Group in May 2021, investing ₹800 crore towards acquiring, stabilising and transforming it.
Since then, Kotak Alts has led a comprehensive turnaround of the project, including completion of pending capital expenditure, major road maintenance, and modernisation of the tolling infrastructure.
These interventions enabled the project to achieve final completion status, improve traffic and toll collections and significantly enhance overall asset performance, Kotak Alts said in the statement.
"The HKR investment demonstrates Kotak Alts' differentiated capability in acquiring and turning around distressed infrastructure assets. Following the acquisition, our focus was on execution, operational improvement and long-term value creation,” said Pratik Parekh, partner at Kotak Alts.
“Through a combination of capital investment, governance enhancement and project-level interventions, we unlocked significant value for investors while creating a stronger infrastructure asset that continues to serve the region's economic development,” Parekh added.
Broadly, Kotak Alts, part of the Kotak Mahindra Group, focuses on alternate asset management and investment advisory businesses. Established in 2005, it has raised, managed or advised over $22 billion across private credit, real estate, real asset, private equity and investment advisory. Each asset class is managed by dedicated, independent specialist teams.