Infrastructure arm of Welspun Group, Welspun Enterprises Ltd (WEL), formerly known as Welspun Projects Ltd, announced expanding its operations in the infrastructure sector by acquiring two road projects from Delhi-based MBL Infrastructures Ltd (MBL).

WEL will acquire 49 per cent stake in two National Highways Authority of India (NHAI)-awarded Hybrid Annuity Model (HAM) projects from MBL becoming the sponsor in these projects — a four-laning of Chutmalpur-Ganeshpur section of NH-72A in Uttar Pradesh and Uttarkhand and four laning of Gagalheri-Saharanpur-Yamunanagar section of NH-73 in UP.

The deal takes WEL’s road portfolio to three HAM projects. In 2015, the company bagged Delhi-Meerut expressway HAM project through the hybrid annuity model from NHAI at a bid project cost of ₹841 crore. Earlier this month, the company announced it had emerged as the lowest bidder for NHAI’s Aunta-Simaria HAM project at the bid price of ₹1,045 crore. However, the company had not yet received a “'Letter of Award' from NHAI for this project.

While MBL transaction, too, is subject to necessary approvals from NHAI, WEL said it has the option to acquire the remaining 51 per cent stake in these projects as and when the NHAI permits.

As per the HAM model, the two projects WEL is entering will have 40 per cent financial support from NHAI, while the debt component of 48 per cent of the project cost with the balance funded by WEL as the sponsor (apart from MBL’ equity). Bid project cost for both projects is ₹2,120 crore and the expected fund commitment from sponsors is ₹250 crore.

“WEL is in the process of completing documentations for financial closure and the appointed date is expected to be announced by NHAI by the end of the month,” the company said in the regulatory filing, adding that the EPC contract of both projects will be executed by WEL.