ET first reported on April 15 that CPPIB and OMERS, two of the biggest shareholders of Indinfravit are planning to infuse around Rs4300 crore into the InvIT to fund the acquisition of a portfolio of five road assets from Brookfield at an enterprise valuation of $1.2 billion.
In a regulatory filing, Indinfravit said that it’s board, at a meeting held on 25 April, has passed a proposal to raise funds through a preferential allotment of units to CPPIB and OMERS.
As per the filing by Indinfravit, CPPIB will be issued 328.74 million units at a price of Rs101 per unit, for a cash consideration of Rs3320.29 crore, while OMERS will be alloted 99 million shares, for a consideration of Rs 999.90 crore.
The fundraising is subject to approval from Indinfravit unitholders.
The Brookfield portfolio that Indinfravit is acquiring comprises three toll road projects – Mumbai Nasik Expressway, Simhapuri Expressway and Rayalseema Expressway – while the other two road assets are annuity projects – Gorakhpur Infrastructure Company and Kosi Bridge Infrastructure Company
The roads portfolio with approximately 2,400 lane kms is spread across the states of Andhra Pradesh, Bihar, Maharashtra and Uttar Pradesh. The portfolio has been operational, on an average, for approximately nine years, and has an average residual concession period of 20 years.IndInfravit’s existing portfolio includes thirteen operational road concessions with approx. 5,000 lane kms spread across five states. The portfolio generated a revenue of Rs1,742 crore in FY22, compared to a revenue of Rs1,576 crore in the previous financial year.
Indinfravit, originally sponsored by India’s largest construction company Larsen & Toubro Ltd has over time become CPPIB’s primary operating roads platform in India. CPPIB was an anchor investor of the InvIT when it was set up in 2018.
L&T has sold down its stake, which it held through L&T Infrastructure Development Projects Ltd (L&T IDPL), in the InvIT in multiple tranches. The last stake sale on 28 February, saw L&T sell 6.05% stake to CPPIB, marking its exit from the InvIT.
In 2021, CPPIB consolidated its shareholding in Indinfravit by acquiring 8.9% stake from L&T IDPL and a 7% stake from Sadbhav Infrastructure Project for a total consideration of Rs1,005 crore.
CPPIB is the biggest shareholder of Indinfravit with 49.9% shareholding, while OMERS stake stands at 20.03%. Allianz Capital is the other big shareholder of Indinfravit with a 22.7% stake.
The proposed funding will take CPPIB’s stake to around 60%, while OMERS will likely become the second biggest shareholder of Indinfravit.
The Brookfield portfolio is the second big road portfolio that Indinfravit is acquiring since its formation. While the initial set of roads came from L&T IDPL, in March 2020 Indinfravit bought a portfolio of nine operating roads from Gujarat based Sadbhav Infrastructure for an enterprise value of Rs6,300 crore.