KKR’s roads InvIT to raise Rs 515 crore through rights issue, ET EnergyWorld

Global private equity major KKR-owned Highways Infrastructure Trust, an infrastructure investment trust (InvIT) set up to acquire operating road assets, is planning to raise Rs515 crore through a rights issue, a stock exchange filing shows.

KKR, the sponsor of the InvIT holds 89.99% stake as of 31 March 2023. Canadian pension fund Ontario Teachers Pension Plan (OTPP) holds a 7.51% stake and the rest is held by other institutional and non-institutional shareholders.

The InvIT, set up in August 2022, comprises six road assets with a total length of more than 450 km across six states in India. The assets, which include a diversified mix of toll and annuity roads, are located in Gujarat, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu, and Telangana.

These roads were acquired by KKR from Global Infrastructure Partners in 2021. In April 2022, OTPP announced an investment of up to $175 million in KKR’s Indian road portfolio.

While Highways Infrastructure Trust did not disclose its intent behind raising capital through a rights issue, a source aware of the plans said that the funds are likely to be used to fund the acquisition of several road projects that KKR is currently negotiating.

The InvIT has signed share purchase agreements to acquire five road projects, four hybrid annuity roads and one toll road, for an approximate enterprise value of Rs2,400 crore.

The InvIT is talks to acquire four hybrid annuity projects from HG Infra Engineering Ltd and one toll road – Navayuga Udupi Tollway.

“…once acquired will increase the value of assets under management by approximately 45% over the formation transaction base. With these transactions, toll projects will comprise approximately 75% of the total portfolio value and balance from annuity/ HAM projects,” Highways Infrastructure Trust noted in its latest annual report.

ET reported on 15 June that Highways Infrastructure Trust is in talks to acquire a portfolio of 12 road projects from Agra-based construction firm PNC Infratech for an enterprise value of about Rs9,000 crore (about $1.1 billion), which if materialises, will be the biggest acquisition of road projects by the US-headquartered private equity firm in India.

KKR currently operates three InvITs in India.

These include the India Grid Trust, an InvIT that owns transmission and solar assets, Virescent Renewable Energy Trust, a dedicated renewable energy trust and Highways Infrastructure Trust.

In May, India Grid Trust announced that it will acquire Virescent for an enterprise value of up to Rs4,000 crore.

  • Published On Jul 8, 2023 at 08:15 AM IST

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