Highways Infrastructure Trust acquires 4 Road Assets worth Rs 30 bn
ROADS & HIGHWAYS

Highways Infrastructure Trust acquires 4 Road Assets worth Rs 30 bn

The Highways Infrastructure Trust (HIT), an infrastructure investment trust (InvIT) owned by KKR, has successfully acquired four road assets from Macquarie India in a deal worth Rs 30 billion. Adani Road Transport had previously agreed to purchase these road assets for Rs 31 billion but cancelled the deal last month, citing unsatisfactory conditions.

In the recent acquisition, HIT will take over Gujarat Road & Infrastructure (GRICL) and Swarna Tollway (STPL), both of which own two toll roads each. Macquarie Asia Infrastructure Fund holds a 56.8 per cent stake in GRICL, with IL&FS owning 26.8 per cent, and the Gujarat government holding the remaining stake.

GRICL's toll roads are located in Gujarat, specifically the Ahmedabad to Mehsana stretch on SH-41 spanning 51.6 kms and the Vadodara to Halol stretch of 31.7 kms on SH-87, which is part of the Delhi-Mumbai Industrial Corridor. On the other hand, STPL's assets are in Andhra Pradesh, encompassing a 110-km stretch from Tada to Nellore on NH-16 connecting ports such as Chennai and Krishnapatnam, and the 48-km Nandigama-Ibrahimpatnam-Vijayawada stretch on NH-65, which provides feeder traffic to NH16.

As of March 31, 2023, KKR holds an 89.99 per cent stake in HIT, while Canada's Ontario Teachers' Pension Plan owns 7.51 per cent and the rest is owned by other institutional and non-institutional shareholders.

Furthermore, HIT is expected to win a 316-km-long highway asset through the ToT 12 auction by the National Highways Authority of India, as it submitted the highest bid of Rs 41.81 billion. This auction covers only one road stretch, from Lalitpur to Lakhnadon on NH26 in Madhya Pradesh, included in the 12th bundle of roads offered under the toll-operate-transfer deal.

Currently, HIT's portfolio consists of six road assets, totaling over 450 kms in Rajasthan, Gujarat, Madhya Pradesh, Meghalaya, Tamil Nadu, and Telangana. Recently, HIT acquired the Navayuga Udupi Tollway, which manages a 90-km stretch of NH 66 in Karnataka. In May, HIT also acquired four projects under the hybrid annuity model from HG Infra Engineering, totaling 100 kms, in Haryana.

Upon completion of these deals, HIT's portfolio will expand to approximately 15 roads, aggregating about 1,000 kms.

According to a report by ratings firm ICRA, road execution activity is expected to increase by 16-21 per cent in FY24, covering 12,000-12,500 km, due to a healthy pipeline of projects, increased government capital outlay, and a focus on project completions ahead of general elections. ICRA also projects toll collections to grow by 6-9 per cent in FY2024, mainly supported by a 4-5 per cent increase in traffic.

The Highways Infrastructure Trust (HIT), an infrastructure investment trust (InvIT) owned by KKR, has successfully acquired four road assets from Macquarie India in a deal worth Rs 30 billion. Adani Road Transport had previously agreed to purchase these road assets for Rs 31 billion but cancelled the deal last month, citing unsatisfactory conditions.In the recent acquisition, HIT will take over Gujarat Road & Infrastructure (GRICL) and Swarna Tollway (STPL), both of which own two toll roads each. Macquarie Asia Infrastructure Fund holds a 56.8 per cent stake in GRICL, with IL&FS owning 26.8 per cent, and the Gujarat government holding the remaining stake.GRICL's toll roads are located in Gujarat, specifically the Ahmedabad to Mehsana stretch on SH-41 spanning 51.6 kms and the Vadodara to Halol stretch of 31.7 kms on SH-87, which is part of the Delhi-Mumbai Industrial Corridor. On the other hand, STPL's assets are in Andhra Pradesh, encompassing a 110-km stretch from Tada to Nellore on NH-16 connecting ports such as Chennai and Krishnapatnam, and the 48-km Nandigama-Ibrahimpatnam-Vijayawada stretch on NH-65, which provides feeder traffic to NH16.As of March 31, 2023, KKR holds an 89.99 per cent stake in HIT, while Canada's Ontario Teachers' Pension Plan owns 7.51 per cent and the rest is owned by other institutional and non-institutional shareholders.Furthermore, HIT is expected to win a 316-km-long highway asset through the ToT 12 auction by the National Highways Authority of India, as it submitted the highest bid of Rs 41.81 billion. This auction covers only one road stretch, from Lalitpur to Lakhnadon on NH26 in Madhya Pradesh, included in the 12th bundle of roads offered under the toll-operate-transfer deal.Currently, HIT's portfolio consists of six road assets, totaling over 450 kms in Rajasthan, Gujarat, Madhya Pradesh, Meghalaya, Tamil Nadu, and Telangana. Recently, HIT acquired the Navayuga Udupi Tollway, which manages a 90-km stretch of NH 66 in Karnataka. In May, HIT also acquired four projects under the hybrid annuity model from HG Infra Engineering, totaling 100 kms, in Haryana.Upon completion of these deals, HIT's portfolio will expand to approximately 15 roads, aggregating about 1,000 kms.According to a report by ratings firm ICRA, road execution activity is expected to increase by 16-21 per cent in FY24, covering 12,000-12,500 km, due to a healthy pipeline of projects, increased government capital outlay, and a focus on project completions ahead of general elections. ICRA also projects toll collections to grow by 6-9 per cent in FY2024, mainly supported by a 4-5 per cent increase in traffic.

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