KKR, Canadian pension fund set to pump in up to Rs 3,000 crore in HIT

KKR, OTPP to infuse Rs 3,000 crore in roads InvIT Highways Infrastructure Trust

Buyout firm KKR and Canada's Ontario Teachers’ Pension Plan (OTPP) are looking to infuse up to Rs 3,000 crore into Highways Infrastructure Trust (HIT), an infrastructure investment trust that operates road projects, people familiar with the development said.

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

The investment will be utilised to fund the acquisition of a portfolio of 12 roads from PNC Infratech for an enterprise value of Rs 9,000 crore.

Separately, the InvIT has also tied up loans from domestic banks for the acquisition of the PNC portfolio, the people said requesting anonymity.

Emails sent to KKR and OTPP did not elicit any response till publication of the article.

KKR-PNC deal likely to be sealed soon

Earlier, the KKR-PNC deal was announced in January. It was not only the biggest deal of the year, but also in the history of the Indian roads sector. The deal is expected to be closed soon.

Earlier, in January 2024, HIT had announced that it had executed definitive agreements for acquisition of twelve road projects from construction firm PNC Infratech Limited and PNC Infra Holdings Limited, in one or more tranches.

The transaction is proposed to be undertaken at an enterprise value of Rs9,005.7 crore, together with earnouts and subject to any adjustments as specified in the agreements, the InvIT said. This will be HIT’s biggest acquisition till date.

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

“Out of the 12 assets, 10 are operational while two are under construction and are expected to be inaugurated by mid- September. They will be thrown open to the public by mid-October,” said one of the sources.

The fundraiser is expected to be closed in November, the sources said.

HIT is also in talks with multiple foreign pension funds and two domestic infrastructure funds for raising capital, they added.

HIT’s current portfolio comprises 10 assets with a total length of 628 km and spans across six states.

HIT’s assets under management (AUM) stand at Rs 10,200 crore, as per its annual report for financial year (FY)2024. The acquisition of the PNC assets will significantly increase InvIT's AUM.