Industry
CPPIB, Cube in last lap for NIIF's Athaang road assets
Summary
- As many as 10 global and domestic infrastructure funds including CPPIB, KKR, Spain’s Abertis, France’ Vinci Highways, Edelweiss’ Sekura Roads and CDPQ had signed non-disclosure agreements for the deal.
NEW DELHI : Canada Pension Plan Investment Board (CPPIB) and Cube Highways are in the final fray for the road assets of National Investment and Infrastructure Fund’s Athaang Infrastructure, two people aware of the matter said. The two entities are expected to submit their binding bids shortly.
JP Morgan is running the transaction, which is expected to have an equity value of around ₹4,000 crore. Final bids are expected in two weeks. While CPPIB is among Canada's largest pension funds, Cube is one of India’s largest private toll road operators.
The portfolio on sale includes five road assets totalling 230 km.
The Economic Times had earlier reported that as many as 10 global and domestic infrastructure funds including CPPIB, KKR, Spain’s Abertis, France’ Vinci Highways, Edelweiss’ Sekura Roads and Caisse de dépôt et placement du Québec (CDPQ) had signed non-disclosure agreements for the deal.
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“CPPIB and Cube Highways are the final two companies in fray for Athaang’s road assets. The final bids are expected within two weeks," said one of the two people cited above, requesting anonymity.
Spokespersons for CPPIB and JP Morgan declined comment, while spokespersons for NIIF and Cube Highways didn’t respond to queries emailed on Wednesday afternoon.
Investor interest
The investor interest comes against the backdrop of rapid road construction in the country, with the government front-loading its ₹2.72 trillion capital expenditure in FY25. Mint earlier reported that in just the first month of the fiscal year, more than 20% of the capex allocated to the road ministry had been spent. In the previous fiscal year, this level of spending was achieved only by the end of May.
NIIF is sponsored by the Indian government, which holds a 49% interest. It focuses on core infrastructure sectors such as transportation, airports, ports, logistics and roads, green energy and digital. The fund manages around $5 billion of equity capital commitments across its three funds—Master Fund, Fund of Funds and Strategic Opportunities Fund—with investments in sectors such as ports and logistics, renewable energy, roads, digital infrastructure, and manufacturing.
Meanwhile, NIIF is looking to sell a significant majority stake in Ayana Renewable Power Pvt Ltd, which has seen non-binding offers from state-run Oil and Natural Gas Corp. (ONGC), Sembcorp Industries Ltd, Macquarie Group, and JSW Neo Energy, that may translate into up to 100% stake sale at an equity valuation of around $800 million.
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Singapore-based Cube Highways investors include I Squared Capital, Abu Dhabi Investment Authority, International Finance Corp., and a consortium comprising Mitsubishi Corp., Japan Overseas Infrastructure Investment Corp. for Transport and Urban Development, East Nippon Expressway Co. Ltd and Japan Expressway Co. International Ltd. Cube Highways was IFC’s first investment in the Indian road sector, with an equity investment of $100 million to buy operational road projects.
Canada's pension funds represent the so-called patient capital, which seeks modest yields over time. India fits their risk profile given that the markets here have matured from the early risk stage. Canadian funds, including Brookfield Asset Management, have been placing significant India bets. Major Canadian pension funds raising their investments in Indian infrastructure include CPPIB, Caisse de dépôt et placement du Québec’ (CDPQ), Public Sector Pension Investment Board (PSP Investments) and Ontario Municipal Employees’ Retirement System (OMERS).
