PremiumThe portfolio on sale includes two roads in south India wholly owned by Macquarie and two which it partially owns. Macquarie is seeking an enterprise value of around ₹4,200 crore. Preliminary talks are underway
MUMBAI : KKR, Cube Highways, and Canadian pension funds CPP Investments and CDPQ have shown preliminary interest in a bunch of road assets put on sale by Macquarie Asset Management, which is seeking an enterprise value of ₹4,200 crore for the roads, two people aware of the development said.
The Australian asset manager’s infrastructure investment fund is working with investment bank JP Morgan to find buyers for these road assets, the people cited above said.
“The portfolio on sale includes two roads in south India wholly owned by Macquarie and two which it partially owns. Macquarie is seeking an enterprise value of around ₹4,200 crore. Preliminary talks are underway," one of the two people cited above said, seeking anonymity as the talks are private.
“There is a strong demand for yield-generating assets such as roads from foreign investors. The Indian roads sector is quite attractive to them given that the regulations are sound and new structures such as infrastructure investment trusts have worked out well for investors in the roads space. While CPPIB and Cube Highways have set up large platforms for owning and operating roads, investors such as KKR and CDPQ have only recently started building out their portfolios and are looking to buy good road assets in India," the person added.
Emails sent to spokespeople for Macquarie and Cube Highways remained unanswered. KKR, CPP Investments, CDPQ and JP Morgan declined to comment on Mint’s queries.
This is not the first set of roads that Macquarie wants to monetize. In December, KKR signed an agreement to acquire five toll roads from Ashoka Concessions for ₹1,337 crore, where Macquarie is a significant minority shareholder, to provide an exit to the investor.
Canadian asset manager Brookfield Asset Management, too, is in the process of monetizing its Indian roads portfolio.
Mint reported in January that Brookfield Asset Management was in talks with three investors to sell Peak Infrastructure, a portfolio of operational road assets owned by the Canadian investor, for an enterprise value of $1.2-1.5 billion.
“Macquarie, while looking at new investment opportunities as it raises its third Asia fund, is actively looking to monetize its existing investments in India. These include roads and renewables assets," said the second person cited above.
While it continues to evaluate Indian infrastructure assets such as roads, green investments will form a major part of its investment thesis going ahead, Deep Gupta, managing director, Macquarie Asset Management, said in an interview in December.
The company is also keen on areas such as digital infrastructure, including data centres, telecom towers and optical fibre infrastructure, Gupta said in an interview.