Government-backed National Investment and Infrastructure Fund Ltd (NIIF) has fully acquired Shapoorji Pallonji Group’s SP Jammu-Udhampur Highway Ltd (SP Jammu-Udhampur) through its NIIF Master Fund, for $290 million (around Rs 2,280 crore).
“The operational road in the union territory of Jammu and Kashmir (J&K) will be managed by NIIF Master Fund’s proprietary roads platform, Athaang Infrastructure,” NIIF said in a statement.
This acquisition adds a fourth asset to the fund’s road portfolio with an aggregate revenue rate of more than $170 million per annum.
“We are now amongst the largest institutional investors in J&K with two large road acquisitions. This acquisition reinforces our underwriting capabilities in closing a complex transaction involving simultaneous equity closure and refinancing of listed non-convertible debentures (NCDs),” said Vinod Giri, managing partner, NIIF Master Fund.
In addition to the road sector platform, Master Fund has anchored platforms in ports and logistics, renewables, data centres and energy smart meters sectors.
In July, NIIF Master Fund announced the purchase of Navayuga Quazigund Expressway, another road asset in Jammu and Kashmir. The fund’s roads portfolio also includes 6-laned Devanahalli Tollway in Bengaluru and the 4-laned Dichpally Tollway in Telangana.
“The asset fits well with NIIF Master Fund’s strategy to have a balanced portfolio with a mix of toll and annuity assets. We will continue to build the NIIF Master Fund Road portfolio with an efficient selection of high-quality assets and superior O&M practices,” added Giri.
This year in June, Master Fund had also announced an investment of around Rs 2,250 crore to acquire around 22.5% in Hindustan Ports Pvt. Ltd (HPPL), a wholly-owned subsidiary of UAE government-controlled firm, DP World.
The latest road asset SP Jammu Udhampur Highway developed the highway project under concession from the National Highways Authority of India (NHAI) on a build-operate-transfer (BOT) basis. The project receives fixed, semi-annual payments from NHAI, providing steady and predictable cash flows.
This four-laned 64.5 km highway includes a 1.4 km twin-tube tunnel stretch.
Anchored by the central government, NIIF manages over $4.3 billion of equity capital commitments across its three funds – Master Fund, Fund of Funds, and Strategic Opportunities Fund.
In December 2020, NIIF Master Fund marked its final close at $2.34 billion, with Canadian pension fund Public Sector Pension Investment Board (PSP Investments), US International Development Finance Corporation (DFC) and Axis Bank, among its Limited Partners (LPs). Its other key LPs include Abu Dhabi Investment Authority (ADIA), AustralianSuper, CPP Investments, Ontario Teachers’ Pension Plan, Temasek, HDFC Group and ICICI Bank.
Master Fund is one of India’s largest infrastructure funds that invests in businesses and assets across core infrastructure sectors. With considerable experience in investing and operating infrastructure assets, the fund focuses on areas that are critical to India’s economic development and long-term growth prospects.
Meanwhile, NIIF recently closed over 50% of its intended target corpus for its direct private equity fund to make bets on both 'sizeable' traditional and new-age companies such as FirstCry, its first investment in the digital ecosystem and latest investment in Bengaluru-based electric two-wheeler company Ather Energy.
