Actis looks to buy Ashoka Concessions for $1.2 billion2 min read . Updated: 06 Dec 2020, 10:13 PM IST
EY is running sales process for the deal having an equity value of around $350 million
NEW DELHI : Private equity major Actis Llp is in talks to acquire highways infrastructure firm Ashoka Concessions Ltd in a potential deal having an enterprise value of around $1.2 billion, two people aware of the development said.
EY is running the sale process for the deal having an equity value of around $350 million, said one of the two people cited above. Ashoka Concessions’ roads portfolio comprises 15 assets, including six operational build, operate, transfer (BOT) toll projects, one operational BOT annuity project and eight under-construction hybrid annuity projects.
Actis plans to pick up a 100% stake in Ashoka Concessions through Actis Long Life Infrastructure Fund, a yield-based fund. “The deal has an enterprise value of around $1.2 billion," said the first person. Actis, which invests only in emerging markets, has committed $2.1 billion to India and has been operating in the energy, financial services and real estate sectors.
While Ashoka Buildcon has a 61% stake in Ashoka Concessions, the balance 39% is held by Macquarie Infrastructure and Real Assets (MIRA), one of the biggest foreign infrastructure investors in India.
The deal has been in the works for a while. Mint had reported earlier that a roads platform operated by the National Investment and Infrastructure Fund and I Squared Capital-owned Cube Highways had expressed interest in buying Ashoka Concessions.
Queries emailed to an Actis Llp spokesperson and Ashoka Buildcon late Thursday night remained unanswered.
In 2012, along with State Bank of India, Macquarie, through its first India-focused fund, had purchased a stake in Ashoka Concessions, a platform to own and operate toll-earning road assets, for ₹800 crore.
Spokespersons for Macquarie Group and EY refused to comment.
Actis’ move for Ashoka’s roads portfolio comes at a time when the highway traffic and toll revenues have touched pre-covid levels. India is also going ahead with its toll-operate-transfer (TOT) model— attempting asset recycling to monetize public infrastructure and build new assets.
India aims to monetize publicly-funded highways to finance the ambitious Bharatmala project. Under the TOT model, investors will have the right to collect toll on selected stretches of national highway for a 30-year period, against an upfront payment to the government. India is also increasing its pace of awarding highway projects to help kick start the economy that has gone into a recession.
State-run National Highways Authority of India (NHAI), the nodal agency for building highways, has awarded 1,330 km of highways in the first half of FY21, which was 1.6 times of the number of projects in FY20 and 3.5 times FY19 levels. It has set a target of awarding 4,500km in FY21.
Actis Long Life Infrastructure Fund recently acquired two solar projects totaling 400 megawatts (MW) from Acme Solar Holdings Ltd.
The company has also emerged as a front runner to acquire a majority stake in Finland’s state-controlled power utility Fortum Oyj’s 500 MW Indian solar projects, Mint had reported on Friday. Actis is also in talks with ReNew Power to acquire over half a gigawatt of green energy projects.