KKR and Sekura among companies in fray for Ashoka’s road assets

Private equity firm KKR, Edelweiss-owned Sekura, I Squared Capital’s Cube Highways and Shrem InvIT are in a race to acquire a portfolio of 11 hybrid annuity model (HAM) road projects of a subsidiary of Ashoka Buildcon, said two people aware of the development. “While many HAM assets are on sale in the market, they are small two-three asset portfolios. Ashoka’s portfolio is one of the biggest HAM portfolios available and hence it has seen interest from multiple players such as KKR, Edelweiss, Cube as well as Shrem,” said one of the people.

The portfolio held by Ashoka Concessions is expected to fetch an enterprise value of close to ₹5,500 crore with an equity value of up to ₹1,300 crore, he said. EY is advising Ashoka Buildcon on the sale process.

Of the 11 roads, seven are operational and four are under construction. Ashoka holds 100% stake in all these projects, spread across the states of Punjab, Jharkhand, Andhra Pradesh, Karnataka, Telangana and Gujarat.

The operational road projects are Kharar-Ludhiana, Ranastalam-Anandapuram, Vadodara-Kim, Khairatunda-Barwa Adda, Belgaum-Khanapur, Tumkur-Shivamogga-I, Kandi-Ramsanpalle. As on December 31, five of these roads collectively generated annuity revenue of ₹676 crore, as per an investor presentation by the company. The four under construction projects are Tumkur-Shivamogga-II, III and IV, and Baswantpur Singnodi. Mails sent to Ashoka Concessions, Sekura, Cube Highways and Shrem InvIT did not elicit any responses till the press time. KKR spokesperson declined to comment

The sale of the 11 HAM road assets follows other monetisation deals by Ashoka for multiple toll road projects.

In December 2021, Ashoka entered into an agreement to sell five toll roads housed under Ashoka Concessions to KKR for ₹1,337 crore. The transaction is yet to be closed. Of the sale proceeds, ₹1,200 crore would be used to provide a complete exit to SBI Macquarie from the Ashoka Concessions platform.