Macquarie is gearing up to sell its biggest infrastructure investment in India — a portfolio of nine roads acquired from the National Highways Authority of India (NHAI), sources told Moneycontrol, adding the sale could be at an enterprise value of Rs 13,000 crore-Rs 14,000 crore (approximately $1.5-1.6 billion).
In 2018, the Australian infrastructure investor acquired the roads portfolio under the toll-operate-transfer (TOT) arrangement, the first and the highest valued bundle of its kind to be sold by NHAI.
The portfolio comprises 648-km projects in Andhra Pradesh and Gujarat.
Macquarie recently started working with a foreign investment bank to run the sale process, which is expected to be launched in the coming weeks, the sources said.
Given the size of the portfolio, Macquarie would be looking to sell the portfolio either as a whole or in three smaller packages, depending on buyer appetite, they said.
If the entire portfolio is sold, this will mark the biggest roads sector deal in India, exceeding KKR’s acquisition of 13 roads from PNC Infratech for an enterprise value of around Rs 9,000 crore in 2024.
Macquarie declined to comment on the development, citing its policy to not comment on “market speculations”.
The sources said in 2023, Macquarie raised fresh loans of Rs 6,100 crore to refinance the debt of its TOT bundle from lenders such as ICICI Bank, National Investment and Infrastructure Fund (NIIF) sponsored infra lending arm Aseem Infrastructure Finance and PSU lender IIFCL.
Majority of the debt, about Rs5,600 crore, was used to repay the existing debt of the portfolio of nine road assets and the remaining amount will be used for maintenance work and planned capex
Debt from existing lenders including HDFC Bank, Yes Bank and State Bank of India was replaced with longer tenure loans of 20 years, resulting in interest cost savings to the tune of 50-100 basis points.
Apart from the longer tenure and better terms, the refinancing was also aimed at offering Macquarie more flexibility in terms of its strategy to exit these road assets.
The refinancing replaced inter-portfolio loan obligations allowing Macquarie to sell these assets individually, if needed.
Major road deals
Last week, IRB Infrastructure Developers’ infrastructure investment trust IRB InvIT Fund said it would buy three roads from a GIC for an enterprise valuation of close to Rs 8,450 crore.
Moneycontrol reported on July 9 that IRB InvIT fund is planning to raise Rs 3,000 crore through a qualified institutional placement, offering to fund the acquisition.
In December, funds managed by EAAA India Alternatives Limited, formerly Edelweiss Alternatives Assets Advisory, signed agreements to acquire a portfolio of 11 roads from construction company Ashoka Buildcon Ltd for an equity value of Rs 2,324 crore or $272 million.
In another major deal, in February, Cube Highways Trust, an InvIT, announced the acquisition of two road assets in Jammu & Kashmir from the National Investment and Infrastructure Fund for Rs 4,184 crore.
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