UK’s global investor Actis has acquired a portfolio of six operating highway toll road projects in India from Welspun Enterprises Limited (WEL), part of the Welspun Group, for a total value of $775 million (Rs 6,000 crore).
The portfolio benefits from a stable mix of annuity and toll cash flows, with the projects located strategically across India including in the most prominent North-South highway corridor, Actis said in a statement.
The projects are being purchased from WEL, part of the Welspun Group, an infrastructure development company focusing on Road, Water and Wastewater segments. The Company also has investments in Oil & Gas Exploration. Backed by experienced management and strong parentage, WEL has a proven track record with the execution of water supply projects and over 1,000 km of road projects, the statement added.
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.
Aligning with this objective, five of the six toll roads have a Hybrid Annuity concession, whereby the concessionaire gets a fixed pay-out to ensure road availability.
“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,” said Adrian Mucalov, Partner, Head of Long Life Infrastructure at Actis.
Actis’ Long Life Infrastructure's recent investments include the purchase of a 50% Dubai headquartered Emirates District Cooling Company (EMICOOL), and the acquisition of Ulug Energy in Turkey.
In April, Actis had sold its renewable energy platform Sprng Energy to Shell Overseas Investment BV, a wholly owned subsidiary of Shell plc, for $1.55 billion (Rs 11,900 crore).
“The toll roads are well diversified and strategically located; they are a highly attractive addition to our portfolio that 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,” said Sumit Sen, Partner at Actis.
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.
In January, Mint reported that Actis is looking to make investments of up to $400 million by acquiring operating road assets in India.
In April, the global private equity investor also marked the final close of its Actis Asia Real Estate 2 (AARE2) fund at $700 million.
Since inception, Actis has raised $24 billion. The investor is keen on sectors such as power, roads, real estate and digital infrastructure.