Dilip Buildcon to sell 24 road projects to Shrem Group for $250 mn

Construction firm Dilip Buildcon has signed a pact with Shrem Group to sell its stake in 24 road projects for Rs 1,600 crore (around $250 million).

As on 30 June 2017, Dilip Buildcon had invested Rs 681.99 crore in these road projects. The company is planning to make an additional investment of Rs 841.61 crore in the projects for which it is raising funds from Chhatwal Group Trust which runs Shrem Group, it said in a stock exchange disclosure.

The 24 road projects include 14 operational projects, four

under-construction projects and six hybrid annuity model projects. The total value of the projects is Rs 10,500 crore.

Established in 2011, Shrem Group is a privately owned family business and is led by brothers Nitan and Hitesh Chhatwal.

In March 2017, it entered the infrastructure sector with investment in the Tuljapur-Ausa HAM project of Dilip Buildcon. This project is one of the 24 projects which it is purchasing now.

Bhopal-based Dilip Buildcon is a road-focussed engineering, procurement and construction firm. The company got listed in August 2016.

In financial year 2016-17, its consolidated operating income was Rs 5,319.15 crore and net profit was Rs 357.68 crore.

In September 2016, private equity firm BanyanTree Capital exited Dilip Buildcon, making three times returns on its four-year-old investment. BanyanTree had invested Rs 75 crore to buy just under 10% stake in Dilip Buildcon in 2012.

In April, IDFC Alternatives, the private equity arm of infrastructure lender IDFC Ltd, acquired a majority stake in two road assets from IPO-bound GR Infraprojects Ltd for an undisclosed amount. The PE firm, through its India Infrastructure Fund II, bought the stake in Jodhpur Pali Expressway Ltd (JPEL) and Shillong Expressway Ltd (SEL) from the Delhi-based company.

In January 2016, private equity firm I Squared Capital agreed to acquire Western UP Tollway Ltd from NCC Ltd, Gayatri Projects Ltd and its subsidiary Gayatri Infra Ventures Ltd for an enterprise value of Rs 575 crore (about $85 million then). Singapore-based Cube Highways and Infrastructure, the Indian toll road and transportation investment platform of I Squared Capital, signed a share purchase agreement with NCC and Gayatri Projects to buy the stake. Western UP Tollway is a four-lane highway project connecting the Meerut-Muzaffarnagar section of NH 58 in Uttar Pradesh under the National Highway Development Project.

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