Es­sel In­frapro­jects in talks to sell part of its roads port­fo­lio

Hindustan Times (Noida) - - HTBUSINESS - Tanya Thomas [email protected]

MUM­BAI:ES­SEL In­frapro­jects Ltd is in talks with in­fra­struc­ture de­vel­op­ers and pri­vate eq­uity (PE) com­pa­nies to sell a part of its roads port­fo­lio, three peo­ple close to the de­vel­op­ment said.

The Sub­hash Chan­dra-con­trolled com­pany has placed six road projects on the block and is seek­ing a com­bined en­ter­prise value of ₹11,500 crore, one of the three peo­ple said. The com­pany wants to com­plete the sale by June, the per­son added, re­quest­ing anonymity.

Sell­ing the roads port­fo­lio will help Es­sel Group gen­er­ate funds for set­ting up a plant to man­u­fac­ture lithium-ion bat­ter­ies that are used in elec­tric ve­hi­cles. In July, Es­sel In­fra said it would in­vest ₹1,750 crore in Ut­tar Pradesh to set up charg­ing sta­tions for elec­tric ve­hi­cles and was look­ing to buy lithium mines out­side In­dia.

The sec­ond per­son said Es­sel In­fra has been in talks with sev­eral com­pa­nies, in­clud­ing road de­vel­oper Cube High­ways and In­fra­struc­ture, backed by in­fra­struc­ture fund I Squared Cap­i­tal; Adani En­ter­prises, which made its first in­vest­ments in pub­lic in­fra­struc­ture in 2018; and three Cana­dian pen­sion funds—caisse de dépôt et place­ment du Québec (CDPQ), Canada Pen­sion Plan In­vest­ment Board (CPPIB) and Roadis, a high­ways plat­form con­trolled by Cana­dian pen­sion fund PSP In­vest­ments.

An Es­sel Group spokesper­son said the com­pany “con­firms the on­go­ing dis­cus­sions with all the prospec­tive part­ners in the ecosys­tem, per­tain­ing to the divest­ment of its road port­fo­lio”.

An Adani Group spokesper­son said: “As part of our busi­ness growth strat­egy, we con­tinue to eval­u­ate var­i­ous op­por­tu­ni­ties. We will in­form all stake­hold­ers if and when some­thing con­crete emerges.” A CPPIB spokesper­son de­clined to com­ment. Emailed queries sent to CDPQ, Cube High­ways and Roadis went unan­swered till press time.

Es­sel In­fra has 14 road projects in its port­fo­lio, of which six are na­tional high­ways and the rest state high­ways, ac­cord­ing to the com­pany’s web­site.

“Adani and Cube are likely to be the front run­ners,” the sec­ond per­son said, re­quest­ing anonymity. “Last year, Adani In­fra had hired Kr­ishna Prakash Ma­hesh­wari as CEO. He used to head Es­sel High­ways ear­lier and knows the Es­sel as­sets well. Adani Group made its first in­vest­ment in pub­lic trans­port in­fra last year, with a high­way project in Ch­hat­tis­garh. Cube has been one of the most ac­tive buy­ers in the roads space in In­dia and had bid the high­est for NHAI’S (Na­tional High­ways Author­ity of In­dia’s) re­cent toll-op­er­ate-trans­fer auc­tion. Es­sel has en­gaged Am­bit Cap­i­tal to ad­vise on the sale.”

Vi­jay Agrawal, ex­ec­u­tive di­rec­tor, Equirus Cap­i­tal Pvt. Ltd, ex­pects deals in the high­ways space to be driven by for­eign pri­vate eq­uity. “De­vel­op­ers are cash-strapped and strug­gling with fi­nan­cial clo­sure in sev­eral of their own projects. I think the trend for 2019 will be de­vel­op­ers sell­ing com­pleted as­sets to PE play­ers to re­cy­cle cap­i­tal.”


Sub­hash Chan­dra, chair­man of Es­sel Group.

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