Essel to sell two road assets to NIIF-Roadis
MUMBAI: The National Investment and Infrastructure Fund (NIIF) and its joint venture partner Roadis are close to buying two road projects from Essel Infraprojects, wholly owned by Subhash Chandra’s debt-laden Essel group, in a deal valued at an estimated ₹1500-1800 crore, said two people aware of the talks.
Mint reported in August that the Essel group had begun talks with NIIF, India’s sovereign wealth fund, and Roadis to sell part of its road portfolio after discussions with Caisse de dépôt et placement du Québec, Canada’s second-largest pension fund manager (CDPQ) fell through last summer. Essel had previously agreed to sell three of its road projects to CDPQ at an enterprise value of ₹3,300-3,500 crore.
NIIF-Roadis came into the picture in July, evaluating Essel’s portfolio of assets, particularly toll roads in Karnataka (the Navayuga Devanahalli Tollway near Bengaluru airport, a national highway), Telangana (Essel Dichpally Tollway, a state highway) and in Madhya Pradesh (the Lebad-Jaora state highway). While the deal is close to being signed now, NIIF has trimmed the final asset count for the deal to just the first two.
NIIF did not respond to emailed queries from Mint.A spokesperson for the Essel group said: “The group cannot share any details due to confidentiality agreements.”
Discussions with the Essel group began soon after NIIF and
Roadis created a joint platform last April that would invest in road projects in India.
Roadis is a subsidiary of the Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension funds.
This joint venture could invest up to $2 billion as equity in public roads in India, by targeting toll-operate-transfer models, acquiring existing road concessions and investment opportunities in the road sector with the aim of creating a large roads platform in the country.
Essel Infraprojects has 14 road projects in its portfolio. Last year, the company had placed six road projects, two operating transmission lines and solar power assets on the block to repay the bulk of the Essel group’s debt.
The deal comes at a time when private investors in the roads sector have turned cautious.