KKR, Canadian pension fund OTPP to infuse Rs 5,500 cr in Highways Infrastructure Trust

KKR will invest Rs 3,576 crore, while OTPP will invest Rs 1,695 crore, according to the filings.

Private equity major KKR and Canadian pension fund Ontario Teachers Pension Plan (OTPP) will invest as much as Rs 5,500 crore in Highways Infrastructure Trust (HIT) that owns and operates highways, according to filings with the stock exchange.

KKR is the sponsor of the highway infrastructure investment trust (InvIT), while OTPP is its second-biggest shareholder.

Moneycontrol had first reported on December 17 that KKR and OTPP were planning to infuse around Rs 5,000-6,000 crore in the InvIT. KKR will invest Rs 3,576 crore, while OTPP will pump in Rs 1,695 crore, according to the filings.

The capital will be used to fund the acquisition of two major road portfolios pegged at more than Rs 15,000 crore (around $1.76 billion). These include 12 roads the InvIT is acquiring from PNC Infratech for an enterprise value of Rs 9,000 crore.

The KKR-PNC agreement, announced in January, is one of the biggest in India’s road sector and is the biggest of the year.

The portfolio comprises 11 hybrid annuity model (HAM) roads from the NHAI, one toll road from the Uttar Pradesh State Highways Authority and represents approximately 3,800 lane kilometres in Rajasthan, Uttar Pradesh, Madhya Pradesh and Karnataka.

The trust is also in the process of acquiring the NHAI’s toll-operate-transfer (TOT) bundle-16 for Rs 6,661 crore. The TOT bundle-16 is a 251km stretch on the Hyderabad-Nagpur corridor of NH-44 in Telangana.

Acquisition of these roads will make Highways Infrastructure Trust one of the biggest owners of operating road assets in the country.