Global investment firm Actis has entered into an agreement to purchase a portfolio of six operating highway toll road projects in India from Welspun Enterprises Limited (WEL), part of the Welspun Group, for an aggregate enterprise value of $775 million (Rs 6,000 crore), company said in a statement.
Five of the six toll roads have a hybrid annuity concession, and the concessionaire gets a fixed pay-out to ensure road availability. The projects are a mix of annuity and toll cash flows, with the projects located strategically across India including in the most prominent north-south highway corridor.
This will be the first road investment in India from Actis’ Long Life Infrastructure Fund (ALLIF), which seeks to invest in stabilised operating assets, within multiple infrastructure sectors that deliver a strong cash yield for investors.
Sumit Sen, partner at Actis, said, “The toll roads are well diversified and strategically located, and aligns perfectly with ALLIF’s investment mandate. We look forward to pursuing similar long life infrastructure projects in the future, including WEL’s balance under construction road portfolio.”
Adrian Mucalov, partner, head of Long Life Infrastructure at Actis, said, “This is a strong, first of its kind, investment for ALLIF, which fully aligns with the fund’s core objective – to invest globally in infrastructure assets that provide consistent yield for our investors.”
The completion of the deal is subject to certain conditions including approval from the lenders of Highway Projects and the National Highways Authority of India and the Public Works Department of Government of Maharashtra.
Actis’ Long Life Infrastructure invests in stabilised operating assets within multiple infrastructure sectors. Recent investments include the purchase of a 50% in Dubai headquartered Emirates District Cooling Company (EMICOOL), and the acquisition of Ulug Energy in Turkey.