MC EXCLUSIVE 3 IPOs in pipeline, KKR’s Asia infra fund set for up to $700 million in exits

KKR’s infrastructure investments in India include India Grid Trust, Vertis Infrastructure Trust, Hero Future Energies, Serentica Renewables and Leap India.

KKR’s Asia Infrastructure Fund, one of the most active investors in India in the sector, is set to reap exits worth almost $600-700 million from three portfolio firms, sources have said.

The American private equity firm has invested in roads and renewables through its Asia funds, deploying a significant portion of its collective $7 billion capital in India. Its investments include India Grid Trust, Vertis Infrastructure Trust, Hero Future Energies, Serentica Renewables and Leap India.

Earlier this month, the KKR Infrastructure Fund sold a stake worth approximately Rs 2,050 crore (around $230 million) in Vertis Infrastructure Trust.

Vertis is an infrastructure investment trust (InvIT), which holds roads and highways. Vertis has assets worth over Rs 25,000 crore.

Moneycontrol was the first to write about KKR’s plan to sell a part of its stake in Vertis. The stake sale was part of its plans to gauge investor interest for the roads InvIT, which it wants to take public in the coming quarters.

Other exits that are in the pipeline include the IPO of Leap India Ltd, a pallet pooling company that services the logistics industry.

Leap India filed the draft papers for its initial public offering on August 29. The IPO size is set at Rs 2,400 crore, of which Rs 2,000 crore (approximately $227 million) is a secondary share sale by KKR.

KKR’s exit pipeline also includes the IPO of Hero Future Energies.

Hero Future Energies is likely to file its draft papers in the next couple of months, while Vertis Infrastructure Trust is in talks to appoint investment banks for its IPO, the sources said.

Both these IPOs are expected to be around Rs 3,000-4,000 crore in size and KKR is expected to sell shares worth around Rs 1,000-2,000 crore (approximately $114-227 million) collectively in these two deals, the sources added.

Collectively, across KKR, it will end up taking home approximately Rs 5,000-6,000 crore from its stake sales.

An email sent to KKR enquiring about its exit plans had not elicited a response at the time of publication.

Compared to traditional infrastructure strategy, where most of such assets are sold to other financial investors or strategic investors in the private market, KKR is tapping the capital markets as the exit route, positioning these as growth platforms against traditional infrastructure yield plays. Other investors, too, are exploring this strategy,” said an investment banker who did not wish to be named.

According to KKR’s latest financial disclosures, as of June 30, its two Asian infrastructure funds have returned a little over $2 billion to investors, so far.

The exit pipeline of $600-700 million from India will significantly boost realisations from Asian infrastructure funds.