Home / News / India /  Adani, DP Jain win bids for highways in toll road auction

Adani Enterprises and construction firm DP Jain & Co have submitted the highest bids for two bundles of highways in the National Highways Authority of India’s (NHAI’s) latest toll road auctions, a person aware of the auction results said. NHAI has raised a total of 2,262 crore through the two bundles totaling 158.6km.

The financial bids for tranche five of the NHAI toll-operate-transfer (TOT) auction were opened on Friday. Adani Enterprises won the first bundle with a financial bid of 1,011 crore, beating Cube Highways, which bid 345 crore, DP Jain and Co. ( 603 crore) IRB Infra ( 518.4 crore), Prakash Asphaltings & Toll Highways (India) Ltd ( 555.55 crore) and a special purpose vehicle by Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ, 646 crore).

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The second bundle was won by DP Jain & Co. for 1,251 crore, beating bids by Adani Enterprises ( 944 crore), Cube Highways ( 182 crore), IRB Infra ( 408.6 crore), Prakash Asphaltings & Toll Highways (India) Ltd ( 535.10 crore) and CDPQ ( 1,043 crore).

NHAI had put up the two road assets on sale at the end of September under the latest round of the TOT mechanism. Both toll roads are located in Gujarat. The first bundle size is 53.6km and the second is 105km.

In a departure from precedent, NHAI did not set a reserve price to the newest round of TOT auctions for roads. This came in the wake of the highest bids in the second and fourth round of auctions being below the base price and investors being hesitant to commit large amounts of capital to public infrastructure in the midst of covid-related uncertainty. The concession periods have also been cut from 30 years to 20 years.

Under the TOT model, long-term concessions for collecting toll revenues from national highways are auctioned to the highest bidder. The model was introduced in 2016 to monetize publicly-funded highways, where investors could make a one-time lumpsum payment in return for toll collection rights of 30 years.

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