London, Mumbai, 9 June 2022: Actis, a leading global investor in sustainable infrastructure, has entered into an agreement to purchase a portfolio of six operating highway toll road projects in India from Welspun Enterprises Limited (WEL), part of the Welspun Group, for an aggregate Enterprise Value of US$775m. The portfolio benefits from a stable mix of annuity and toll cash flows, with the projects located strategically across India including in the most prominent North-South highway corridor.
This will be the first road investment in India from Actis’ Long Life Infrastructure Fund (ALLIF), which seeks to invest in stabilised operating assets, within multiple infrastructure sectors that deliver a strong cash yield for investors. Aligning with this objective, five of the six toll roads have a Hybrid Annuity concession, whereby the concessionaire gets a fixed pay-out to ensure road availability. The concessions for the five projects are awarded by National Highways Authority of India and have received a AAA local credit rating.
The projects are being purchased from WEL, part of the Welspun Group, an infrastructure development company focusing on Road, Water and Wastewater segments. The Company also has investments in Oil & Gas Exploration. Backed by experienced management and strong parentage, WEL has a proven track record with the execution of water supply projects and over 1,000 km of road projects.
The completion of the deal is subject to certain conditions including approval from the lenders of Highway Projects and the National Highways Authority of India and the Public Works Department of Government of Maharashtra.
Adrian Mucalov, Partner, Head of Long Life Infrastructure at Actis, said: “This is a strong, first of its kind, investment for ALLIF, which fully aligns with the fund’s core objective - to invest globally in infrastructure assets that provide consistent yield for our investors.”
Sumit Sen, Partner at Actis, added: “We are pleased to deepen our commitment to India by supporting the development of some of India’s most exciting infrastructure projects. The toll roads are well diversified and strategically located; they are a highly attractive addition to our portfolio that aligns perfectly with ALLIF’s investment mandate. We look forward to pursuing similar long life infrastructure projects in the future, including WEL’s balance under construction road portfolio.”
Actis’ Long Life Infrastructure team invest in stabilised operating assets within multiple infrastructure sectors, driving operational value, to deliver a strong cash yield for investors and measurable ESG impact. Recent investments include the purchase of a 50 percent stake in Dubai headquartered Emirates District Cooling Company (EMICOOL), and the acquisition of Ulug Energy in Turkey.