PE firm KKR has signed agreements to acquire 100% equity stake in Hyderabad based Navayuga group’s toll road – Navayuga Udupi Tollway – for an enterprise value of ₹924 crore, said two sources.
Navayuga Udupi Tollway owns and operates a 90.1 km road project located in Karnataka, comprising Kundapur-Surathkal section of 74.8 km and Mangalore-Kerala border section of 15.3 km. The road project is part of the national highway 66 which connects Mumbai to Kanyakumari. The toll road has a concession period of 25 years starting 2010.
The acquisition of the road asset will be done through an infrastructure investment trust (InvIT) set up by KKR to house all the operating road assets that it acquires.
“KKR has signed share purchase agreements with Navayuga for the acquisition a few days ago. Approvals from authorities such as National Highways Authority of India and lenders of the project are being worked on and the deal is likely to be closed before the end of H1 FY24,” said one of the sources.
“The acquisition will be funded by raising debt at the InvIT level as well as via internal accruals. The 90 km road has been collecting toll since 2017 and generates ₹80 crore of revenue per year. The toll collection improved strongly in FY23 on the back of rising traffic and hike in toll rate,” he added.
Navayuga Udupi Tollway is promoted by Navayuga Engineering Company Ltd, which holds a 59% stake and the group’s holding company for road assets – Navayuga Road Projects – holds the remaining 41% stake.
Emails sent to KKR and Navayuga group did not elicit a response.
KKR began investing in Indian roads in 2021 when it acquired Global Infrastructure Partners’ entire stake in Highway Concessions One (HC1) highway assets totalling 487km. The HC1 road portfolio is spread across seven states-Gujarat, Karnataka, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu and Telangana. The portfolio comprised five toll roads and two annuity roads.
Currently, the assets housed under the KKR roads InvIT include Jodhpur Pali Expressway, Godhra Expressways, Dewas Bhopal Corridor, Ulundurpet Expressways, Normal BOT, and Shillong Expressway.
Source: Economic Times