Goldman Sachs to lend $85m to India’s Essel Highways

The Indian road developer is raising $220m through a debt issuance to finance new projects and strategic acquisitions.

Essel Highways, a subsidiary of India’s Essel Infraprojects, has secured an $85 million loan from investment bank Goldman Sachs, as part of a larger $220 million debt issuance. 

The Mumbai-based highways developer hopes to raise funds for financing its new projects and strategic acquisitions. It expects the remaining balance of debt issuance to be subscribed by other financial institutions and investors. 

Essel Highways, founded in 2007, has a road development portfolio of 14 projects with assets valued at approximately $1.8 billion. Ten of the projects, equaling more than 4,500 lane-kilometres across six states, are operational, the company said in a release. 

“The subscription of our debentures from a global reputed institution like Goldman Sachs further strengthens our position and help us in our endeavor towards becoming the most valued infrastructure company in India,” said Ashok Agarwal, chief executive of Essel Infraprojects. 

India has the world’s second-largest road network at 4.7 million kilometres. According to the Road Transport and Highway Ministry, India has reached a record-breaking rate of adding approximately 28km per day over the last two years.

Investors, including Brookfield, I Squared Capital and IDFC Alternatives, have invested in the sector since regulation was revised last August to allow road developers to fully divest equity in operating projects. They are also reportedly looking for more opportunities in the roads sector while Indian road developers are looking to divest their operating assets to raise funds for future expansions and debt reduction.