IndInfravit completes acquisition of Sadbhav’s road assets for ₹6,300 crore

IndInfravit Trust, an infrastructure investment trust (InvIT) sponsored by the L&T Group, on Thursday, said it has completed the acquisition of nine operational road assets from Sadbhav Infrastructure Project Ltd for ₹6,300 crore.

“InvIT, as a structure has facilitated a new investor class with a keen interest to allocate large capital towards infrastructure landscape. InvITs, backed by marquee overseas investors, create the necessary ecosystem to support the government’s ambitious plan to develop high quality infrastructure in the country,” J Subramanian, chief executive officer of LTIDPL IndvIT Services Ltd— the investment manager of IndInfravit, said in a press statement on Thursday.

After having signed a definitive agreement in July 2019, IndInfravit trust has now acquired 100% of the equity shareholding and economic interest held by Sadbhav in the eight road assets, namely Bhilwara Rajsamand Tollway, Dhule Palesner Tollway, Hyderabad Yadgiri Tollway, Nagpur Seoni Expressway, Shreenathji Udaipur Tollway, Bijapur-Hungund Tollway, Aurangabad Jalna Tollway and Mysore-Bellary Highway, for ₹6,300 crore.

The infrastructure investment trust is yet to acquire the last of the nine assets, Ahmedabad Ring Road Infrastructure, for which IndInfravit has already entered into definitive documentation with Sadbhav, but is still awaiting for the required regulatory approvals and fulfillment of certain other conditions set out under the definitive documents.

The acquisition is being made through a mix of cash payment and preferential issue of units of IndInfravit. Post completion of the transaction, Sadbhav will hold up to 10% units in IndInfravit.

IndInfravit, sponsored by L&T Infrastructure Development Projects Ltd (L&T IDPL), currently holds a portfolio of five operational toll road concessions. This transaction, according to the statement, was in line with IndInfravit’s strategy to acquire additional road projects in India, and to expand its current road portfolio of five operational toll road concessions.

For the acquisition it raised cash from some of its major unitholders such as L&T IDPL, Canada Pension Plan Investment Board (CPP Investments), Allianz insurance companies and OMERS Infrastructure, the infrastructure arm of Canadian pension fund OMERS Administration Corporation.

IndInfravit also undertook an issue of non-convertible debentures to refinance majority of the financial indebtedness of its newly acquired roads portfolio.

The roads portfolio that IndInfravit is buying comprises six toll roads and two annuity roads, with total 2,300 lane kms in Karnataka, Maharashtra, Rajasthan and Telangana. These roads have been operational, on an average, for over six years and are used by diverse groups of road users and commercial traffic, the statement said.

Investment bank Ambit Pvt. Ltd acted as the financial adviser to IndInfravit, while Morgan Stanley advised Sadbhav Infrastructure.