On Thursday, Caisse de dépôt et placement du Québec (CDPQ), one of Canada’s largest institutional investors with C$333 billion in net assets under management, announced its first transportation investment in India with the purchase of a 67-km toll road.
The seller is Bharat Road Network Limited (BRNL), one of India’s leading road developers, which signed an agreement for the sale with India Highway Concession Trust, an infrastructure investment trust set up by CDPQ for the asset, a highway in the Indian state of Odisha.
BRNL is currently the largest shareholder in the road, formally known as the Shree Jagannath Expressway, with a 40 percent stake in the build-operate-transfer (BOT) project. The 67-kilometer expressway runs from Bhubaneswar to Chandikhole, in the state of Odisha. Project operations started in December 2011, with an initial concession period of 26 years.
The deal parties noted in an official release that with commercial traffic on Indian highways recovering to pre-pandemic levels, the agreement signals “renewed focus on M&A activities in the roads sector.”
“We are thrilled with the acquisition of Shree Jagannath Expressway. It will be the first asset integrated into the new CDPQ-owned roads platform in India, which we set up and staffed in 2020,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ. “This reflects our long-term confidence and interest for the sector, and more broadly the Indian infrastructure market.”
Also commenting on the sale, BRNL Managing Director Bajrang Kumar Choudhary, Managing Director said the transaction is in line with BRNL’s strategic plan to create value for stakeholders by reallocating portfolio assets, while making existing assets more financially efficient and operationally enhanced.
“The transaction is expected to help BRNL reduce its debts, and will also provide the company with funds for reinvesting in its existing assets under construction,” Mr. Choudhary said.
The transaction is subject to regulatory approvals and other closing conditions.
BRNL develops, operates and maintains multiple national and state highways across India. Its current project portfolio spans six BOT projects, spanning 2,095 lane kilometers in the states of Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra, as well as Odisha.
In November 2019, CDPQ acquired a platform of seven mature, operating toll road assets in India from private infrastructure investor GIP.
