NIIF acquires north India tunnel road in third highways deal

 NIIF acquires north India tunnel road in third highways deal

The National Investment and Infrastructure Fund (NIIF) has struck its third deal in the roads sector and the second this year, as the quasi-sovereign fund manager backed by the Indian government expands its highways portfolio.

The NIIF said Monday it has acquired an equity stake in Navayuga Quazigund Expressway Pvt. Ltd through the NIIF Master Fund at an enterprise value of around $380 million. It didn’t disclose the size of the stake or the amount it invested.

Navayuga Quazigund operates a tunnel road in the union territory of Jammu and Kashmir. The four-laned 16.3-km expressway between Quazigund and Banihal Section of NH-1A includes a bi-directional 8.5-km continuous twin-tube tunnel stretch, one of the longest highway tunnels in India. It will be managed by NIIF Master Fund’s roads platform Athaang Infrastructure.

The NIIF said NQEPL is one of the largest annuity projects awarded by the National Highways Authority of India (NHAI) on a build-operate-transfer basis. The project receives fixed, semi-annual payments from NHAI, providing stable and predictable cash flows.

Vinod Giri, Managing Partner at NIIF Master Fund, said this is the first tunnel road that the NIIF has acquired. “We will continue to build the NIIF Master Fund’s road portfolio with an efficient selection of high-quality assets and superior operations and maintenance (O&M) practices.”

NIIF Master Fund also holds the six-laned Devanahalli Tollway in Bengaluru and the four-laned Dichpally Tollway in Telangana. The fund is in various stages of acquiring a few other strategic road assets, the NIIF said.

The NIIF had sealed its first deal in the highways sector in late 2019 when it acquired two projects from Essel Group. The Devanahalli Tollway in Karnataka and the Dichpally Tollway in Telangana are now operated by Athaang Infrastructure, the Mumbai-headquartered proprietary roads platform incubated by the NIIF.

In April this year, the NIIF signed an agreement to acquire GVR Ashoka Chennai ORR Ltd for Rs 686 crore ($89.5 million) from Mumbai-listed Ashoka Buildcon Ltd.

GVR Ashoka Chennai ORR is a special purpose vehicle incorporated by GVR Infra Projects and Ashoka Buildcon Ltd to develop and operate a six-lane road project, Chennai Outer Ring Road Phase II, in Chennai, Tamil Nadu. It has a 20-year concession, which expires in March 2034, from the Highways and Minor Ports Development and the government of Tamil Nadu to implement the project under the build-operate-transfer annuity model.

The NIIF makes both direct investments in infrastructure and other sectors as well as Limited Partner commitments to private equity and venture capital funds. It manages more than $4.5 billion of equity capital commitments across a Master Fund, the fund of funds, and a Strategic Opportunities Fund (SOF).

The Master Fund mainly invests in operating assets in core infrastructure sectors such as transportation and energy. The SOF focuses on sectors such as financial services, food and agriculture, healthcare and education.

Earlier this year, the SOF made its maiden investment in the digital ecosystem with an investment in FirstCry. Last year, it invested $287 million in TPG-backed Manipal Hospitals. It had also pitched in to create two interlinked infrastructure-oriented debt finance companies.

Also read: After CDPQ bets on DP World’s UAE assets, NIIF comes on board India arm

Sumit Upadhyaya

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