CDPQ may sell ₹1,500 crore stake in India InvIT to meet norms

CPDQ, Canada's second largest pension fund, is set to bring a new investor into India Highway Concession Trust, its infrastructure investment trust (InvIT) in the country, two people aware of the development said. Caisse de depot et placement du Quebec (CDPQ) has hired Morgan Stanley to find a buyer for the minority stake, in order to fulfil the mandatory requirement for InvITs in India.

CDPQ is likely to raise about $150-$200 million (₹1,000 -1,500 crore) by selling additional stake in the InvIT, the sources said. The sale process is expected to be launched early next month. Investment manager Maple Infra Invit Investment Manager manages the assets of India Highway Concession Trust.

At present, about five investors together hold about 25% in India Highway Concession Trust.


As per guidelines by capital markets regulator, the Securities and Exchange Board of India (Sebi), the minimum threshold of equity dilution in an unlisted InvIT is 25%. However, as the India Highway Concession Trust won the Toll Operate Transfer (TOT) 7 bundle from the National Highways Authority of India (NHAI) last month, the InvIT became larger in size.

"Though India Highway Concession Trust has already met the Sebi guideline of minimum stake dilution of 25%, the ₹6,300-crore TOT 7 acquisition has forced CDPQ to sell additional stake in the InvIT as the valuation has shot up," said a source close to the development.

CDPQ plans to bring in either a foreign institutional investor or a pension fund, the source added.

A spokesperson for CDPQ declined to comment.

Besides the TOT 7 bundle buyout, CDPQ owns two road assets in India under the InvIT.

India Highway Concession Trust owns Shree Jagannath Expressway, a 67-kilometre toll road project from Bhubaneswar to Chandikhole in Odisha and 18.6-km Durg Bypass, a road asset in central India acquired from the Tata group.