Edelweiss Alternatives plans to raise up to Rs 3,000 crore from roads InvIT

This will be the second InvIT from EAAA, which in November 2022 launched its energy trust called Anzen Energy Trust with assets under management of Rs 2,300 crore.

EAAA India Alternatives Ltd, earlier Edelweiss Alternatives, is planning to raise up to Rs 3,000 crore through an infrastructure investment trust (InvIT) that will house road assets, people aware of the matter told Moneycontrol.

This will be the second InvIT from EAAA, the alternative asset management arm of the Edelweiss group, which in November 2022 launched an energy trust called Anzen Energy Trust with assets under management of Rs 2,300 crore.

“They have begun initial discussions on the InvIT. The entire existing portfolio of roads, currently owned by their infra funds, is likely to be transferred, while the recently acquired new roads assets are likely to be transferred to the InvIT later,” one of the sources cited above said.

EAAA invests in private credit, infrastructure, and other asset classes. It invests in infrastructure through its Yield Plus Funds, which have assets worth Rs 12,000 crore. Currently, it is investing out of its second fund called Infrastructure Yield Plus II

The funds to be raised will be used to return some capital to the investors of the Yield Plus Funds as well as to repay debt of the road projects that will be housed under the trust, the source said.

The plans are in early stages and the quantum of fundraise could change as the deal matures, depending on the amount of secondary stake sale that EAAA wants to do, the person added.

Also Read: Edelweiss' alternate asset subsidiary EAAA India files DRHP for up to Rs 1,500 crore IPO

In April 2024, EAAA closed its biggest acquisition of roads when it acquired a portfolio of assets from Larsen & Toubro Infrastructure Development Projects for an enterprise value of 6,000 crore.

The portfolio included seven toll road projects spanning 4,400 lane kilometre and one 960 circuit kilometre power transmission line.

The acquisition helped EAAA’s infra fund’s road holdings to reach 5,000 lane kilometres.

The infrastructure fund’s most recent purchase was the acquisition of a portfolio of 11 hybrid annuity model (HAM) roads from Ashoka Buildcon Ltd and its subsidiary, Ashoka Concessions Lt,d in a Rs 2,32- crore deal. These roads are in the states of Punjab, Andhra Pradesh, Maharashtra, Telangana, Gujarat, Jharkhand, and Karnataka.

Moneycontrol was the first to report on the Edelweiss and Ashoka Buildcon deal on February 19, 2024.

EAAA declined to comment on the development.

InvIT landscape 

The infrastructure investment trust model has become a popular route for investors to monetise their operating infrastructure assets across asset classes such as power transmission, roads, renewables energy and warehousing.

Roads, by far, are the biggest asset class when it comes to InvITs.

The first roads InvIT was set up by IRB Infrastructure Developers in 2017 and today there close to a dozen such trusts which hold operating road projects.

Investors such as KKR, I Squared Capital and Actis have set up road InvITs. Several developer-sponsored trusts such as IRB’s second InvIT with Singapore’s GIC, the National Highway Authority of India sponsored National Highway Trust, Capital Infra Trust and Shrem InvIT have also come up.