Macquarie’s $1.3-billion TOT roads sale draws interest from KKR, Cube, CDPQ, IRB and EAAA

Moneycontrol first reported about the launch of the sale process on July 14.

Australian infrastructure investor Macquarie, which is looking to monetise its road assets, has drawn interest from a host of buyers, including KKR-sponsored Vertis Infrastructure Trust, Cube Highways, CDPQ-owned Maple Infrastructure Trust, IRB and GIC sponsored IRB Infrastructure Trust as well as EAAA,  sources told Moneycontrol.

The sale of the nine toll road portfolio is expected to achieve an enterprise valuation of around Rs 10,000 crore and Rs 12,000 crore (approximately $1.1 billion to $1.3 billion), they said.

Moneycontrol first reported about the launch of the sale process on July 14. 

Macquarie acquired the portfolio in 2018 under the toll-operate-transfer (TOT) monetisation process, the first and the most valued such bundle to be sold by the National Highways Authority of India (NHAI) till date. The portfolio consists of road projects spanning 648 km across Andhra Pradesh and Gujarat.

Given the size of the portfolio, the firm is open to selling the portfolio as a whole or in three smaller packages, depending on buyer appetite, sources said.

If the entire portfolio is sold, this will mark the biggest roads deal in India, after KKR’s acquisition of 13 roads from PNC Infratech Limited for an enterprise value of around Rs 9,000 crore in 2024.

One of the persons cited above added that most interested buyers are keen on acquiring the entire portfolio.

Macquarie and CDPQ declined to comment. Emails sent to KKR and Vertis Infrastructure Trust, Cube Highways, IRB Group and EAAA had not elicited a response at the time of publication.

Moneycontrol has reported that in 2023, Macquarie raised around Rs 6,100 crore in loans to refinance the its TOT debt from lenders such as ICICI Bank, National Investment and Infrastructure Fund (NIIF) sponsored infra lending arm Aseem Infrastructure Finance and PSU lender IIFCL.

Around Rs 5,600 crore of the debt was allocated to refinance existing loans for the nine-asset road portfolio. The remaining was set aside for maintenance work and planned capital expenditure. The refinancing replaced existing lenders, including HDFC Bank, Yes Bank, and State Bank of India, with longer-tenure, 20-year loans, resulting in interest cost savings of 50–100 basis points.

The refinancing also aimed at offering Macquarie more flexibility to exit the road assets. The refinancing replaced inter-portfolio loan obligations, allowing Macquarie to sell these assets individually, if needed.

Big-ticket road deals

In May, IRB Infrastructure Developers Ltd announced that its publicly traded infrastructure investment trust - IRB InvIT Fund - will buy three roads from a private InvIT sponsored by IRB and Singapore’s sovereign wealth fund 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 to fund the acquisition.

In December, funds managed by EAAA India Alternatives Limited, formerly Edelweiss Alternatives Assets Advisory, signed agreements to acquire 11 roads from Ashoka Buildcon for an equity value of Rs 2,324 crore or $272 million.