The Edelweiss group, on June 7, announced the buyout of two annuity road assets in north- east India from engineering and core infrastructure player Navayuga Engineering ,the flagship entity of the Hyderabad based Navayuga group which is in deleveraging mode.
“The buyout has been struck for an enterprise value of nearly $150 million,” a source with knowledge of the matter told Moneycontrol. The transaction is one of the first infrastructure deals to be closed during the ongoing lockdown.
With the government’s thrust on boosting economic activity in north- east India, The Dhola and Dibang roads are of strategic importance as they ensure seamless all-weather connectivity between north- east and the rest of India. The Dhola bridge - the country’s longest river bridge, inaugurated by Prime Minister Narendra Modi in 2018 has opened new doors for economic development to both the states of Assam and Arunachal Pradesh.
The assets, namely Navayuga Dhola Infra Projects Limited (in Assam) and Navayuga Dibang Infra Projects Private Limited (in Arunachal Pradesh) have been acquired by the Edelweiss Group’s alternative investment fund Edelweiss Infrastructure Yield Plus and its portfolio company Sekura Roads Ltd.
Edelweiss Infrastructure Yield Plus which was floated two years back has gradually emerged as one of the most active domestic acquirers in the infra segment and now manages assets worth $1.5 billion. It competes with the likes of IndiGrid, Cube Highways and funds like GIC, KKR & Actis.
The fund is present in the transmission, road/highways and renewable energy segment and looks at helping Indian infrastructure companies to recycle their capital and focus on their core construction business. In June 2019, it acquired two transmission assets from Essel Infra and in January 2020, it acquired a 74 percent stake in French gas and power utility Engie’s solar assets in India.
Edelweiss Alternative Asset Advisors which manages Edelweiss Infrastructure Yield Plus has an AuM of over Rs. 28,000 crores. It focuses on providing long term growth capital to corporates. “Acquiring operating infrastructure assets provides impetus to the revival of the sector by helping construction companies to release capital and de-lever, enabling them to commence new projects which contribute to nation building and is becoming the core model to meet India’s infrastructure capital requirement,” said Hemant Daga, Deputy CEO - Edelweiss Global Investment Advisory
“We are happy to see the acquisition of these high-quality road assets to the Sekura Roads portfolio. This is in line with our strategy of investing in Infrastructure assets which can deliver predictable long-term yield to our investors. We now have a healthy portfolio of operating transmission and operating annuity road assets," said Subahoo Chordia, Head of Edelweiss Infrastructure Yield Plus.
Chordia was previously associated with the group’s investment banking business and has spent two decades in the infrastructure sector.
Sachin Bhansali, CFO - Navayuga group, added “Navayuga group is looking to de-leverage its balance sheet and asset monetization is a critical component. This transaction will significantly ease out the debt position of the group and help free up cash.”