CDPQ to acquire Ashoka's BOT toll road assets for Rs 45 billion
ROADS & HIGHWAYS

CDPQ to acquire Ashoka's BOT toll road assets for Rs 45 billion

After a year of negotiations, the Canadian pension fund CDPQ is poised to acquire five build-operate-transfer (BOT) toll road assets from Ashoka Concessions, a subsidiary of the highway builder Ashoka Buildcon, for an enterprise value of Rs 45 billion.

The deal is expected to be finalised this week, as stated by these sources, who noted that CDPQ will acquire the assets through its infrastructure trust, the Indian Highway Concession Trust (IHCT).

Ashoka Buildcon currently holds a 66% stake in Ashoka Concessions, while the remainder is owned by SBI Macquarie. Macquarie had invested Rs 8 billion in Ashoka Concessions in 2012 through the Macquarie-SBI Infrastructure Fund (MSIF).

CDPQ and UK-based Actis were reportedly in the final stages of competition for the assets, as first reported by ET in December. Initially, the global investment firm KKR had agreed to purchase the BOT assets for Rs 13.37 billion; however, KKR abandoned the deal in May of the previous year. This prompted Ashoka Concessions to initiate discussions with various funds, including CDPQ, Actis, Sekura, and NIIF, in September 2023.

Maple Highways, CDPQ's platform for the Indian road sector, sponsors the IHCT, which includes two assets: the Eastern Peripheral Expressway in the National Capital Region under ToT7, and the Shree Jagannath Expressways in Odisha.

All five toll projects under Ashoka Concessions are operational, boasting an average tolling track record of 10 years and established traffic density. In FY24, these toll projects reported a 12% increase in collections, amounting to Rs 12.47 billion. According to a recent ICRA report, toll collections are expected to exceed Rs 13 billion in the current fiscal year, driven by a modest rise in toll rates and moderate traffic growth.

Spokespeople for CDPQ and Macquarie declined to provide comments, and Ashoka Buildcon did not respond to ET's inquiries. Currently, among the five investors collectively holding about a 25% stake in IHCT are the private investment office of the Suresh Kotak family, the IIFL group, and the Taparia family, which founded contraceptive maker Famy Care. The remaining stake is held by CDPQ.

After a year of negotiations, the Canadian pension fund CDPQ is poised to acquire five build-operate-transfer (BOT) toll road assets from Ashoka Concessions, a subsidiary of the highway builder Ashoka Buildcon, for an enterprise value of Rs 45 billion. The deal is expected to be finalised this week, as stated by these sources, who noted that CDPQ will acquire the assets through its infrastructure trust, the Indian Highway Concession Trust (IHCT). Ashoka Buildcon currently holds a 66% stake in Ashoka Concessions, while the remainder is owned by SBI Macquarie. Macquarie had invested Rs 8 billion in Ashoka Concessions in 2012 through the Macquarie-SBI Infrastructure Fund (MSIF). CDPQ and UK-based Actis were reportedly in the final stages of competition for the assets, as first reported by ET in December. Initially, the global investment firm KKR had agreed to purchase the BOT assets for Rs 13.37 billion; however, KKR abandoned the deal in May of the previous year. This prompted Ashoka Concessions to initiate discussions with various funds, including CDPQ, Actis, Sekura, and NIIF, in September 2023. Maple Highways, CDPQ's platform for the Indian road sector, sponsors the IHCT, which includes two assets: the Eastern Peripheral Expressway in the National Capital Region under ToT7, and the Shree Jagannath Expressways in Odisha. All five toll projects under Ashoka Concessions are operational, boasting an average tolling track record of 10 years and established traffic density. In FY24, these toll projects reported a 12% increase in collections, amounting to Rs 12.47 billion. According to a recent ICRA report, toll collections are expected to exceed Rs 13 billion in the current fiscal year, driven by a modest rise in toll rates and moderate traffic growth. Spokespeople for CDPQ and Macquarie declined to provide comments, and Ashoka Buildcon did not respond to ET's inquiries. Currently, among the five investors collectively holding about a 25% stake in IHCT are the private investment office of the Suresh Kotak family, the IIFL group, and the Taparia family, which founded contraceptive maker Famy Care. The remaining stake is held by CDPQ.

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