Singapore company to acquire RInfra’s Delhi-Agra toll road

Mumbai: Singapore-based infrastructure investment platform Cube Highways and Infrastructure Pte Ltd is acquiring 100 per cent stake in DA Toll Road Pvt Ltd (DATRPL), a special purpose vehicle that operates a toll road connecting Delhi and Agra, from Anil Ambani-owned Reliance Infrastructure (R-Infra) Ltd.

With this buyout, I Squared Capital-owned Cube Highways group portfolio will have over 4,500 lane km of highways across India.

The deal has been signed at an enterprise value of Rs 3,600 crore.

“We are pleased to expand our presence in the Indian highway sector with the acquisition of another quality asset,” said Gautam Bhandari, director at Cube Highways and Partner at I Squared Capital.

Sources said R-Infra will get Rs 1,689 crore for the equity while the remaining documents will get transferred and subsequently recast.

Reliance Infrastructure said the proceeds from the sale will be used for debt reduction.

"With this transaction, debt to reduce by over 25%, to less than Rs 5,000 croreagainst a net worth of Rs23,700 crore," Reliance Infrastructure said in a statement Thursday.

In addition to this, National Highways Authority of India (NHAI) claims of Rs 1,200crore, to be filed by DATRPL, will flow directly to Reliance Infrastructure, the company said.

"The transaction is in line with Reliance Infrastructure’s strategic plan of monetising non-core business and focus on major growth areas like engineering and construction business," the company said.


ET had first reported on February 25 that a handful of strategic and PE investors have joined the race to acquire DATRPL, which operates the 180 km, six-lane toll road on National Highway (NH) 2.

The road is a 26-year concession granted in 2010 for strengthening and widening the four-lane highway to a six-lane configuration and began collecting tolls in October 2012.

“DATRPL forms a core part of NH 2, a main artery of the national highways network connecting north to east and central India,” said Harikishan Reddy, CEO at Cube Highways Advisors.

“The road has robust growth potential as it connects major industrial and tourist centres in North India including Delhi, Faridabad, Mathura and Agra. We anticipate even further growth following completion of the entire NH 2 road project.”

Formed by I Squared Capital and the International Finance Corp (IFC), Cube has investors such as Mitsubishi Corp and sovereign wealth fund Abu Dhabi Investment Authority.

Following asset disposals such as the Mumbai power and cement business in the past few years, Reliance Infrastructure’s debt has dropped 65 per cent to Rs 7,000 crore. A deal for the toll road would mean this falling to less than Rs 5,000 crore.

Besides Reliance Infrastructure, several other toll-road developers including IRB Infra, Ashoka Buildcon and Sadbhav Infra are selling their build-operate-transfer assets.

Cube was one among the contenders to acquire the road assets owned by Sadbhav Infrastruture.

On 11 March, ET had reported Canada’s largest pension fund manager Canada Pension Plan Investment Board's (CPPIB) interest to acquire 12 operating road assets of Sadbhav Infrastructure Project Ltd.

Awarding of highway construction projects rocketed 70 per cent to an alltime annual high in fiscal 2018, spanning 7,400 km and valued at Rs 1.2 lakh crore, as per NHAI data. That compares with 4,300 km of projects worth Rs 59,000 crore awarded in fiscal 2017.

Highway construction companies are set to clock a 20 per cent compound annual growth rate in revenue till 2020, according to ratings agency Crisil.