I Squared-IFC platform acquires Indian toll road

Cube Highways and Infrastructure (Cube Highways), a Singapore-based company jointly owned by I Squared Capital and the International Finance Corporation (IFC), has agreed to acquire 100 percent of Western UP Tollway, an operating toll road in North India.

The INR5.75 billion (€78.3 million; $84.9 million) transaction will see the platform acquire the asset from local developers Nagarjuna Construction Company (NCC) and Gayatri Infra Ventures, which respectively hold 51 percent and 49 percent of the motorway. The transaction is expected to complete within two months.   

The Western UP Tollway operates a 77.8 kilometre (km), four-lane stretch of the National Highway 58 (NH-58) between the cities of Meerut and Muzaffarnagar in the state of Uttar Pradesh. 

The road was built for a total cost of INR7.56 billion, according to local press reports. The asset's turnover in the consolidated accounts of NCC is understood to stand at INR1.08 billion for the last financial year.

“We are pleased with the rapid growth of the Cube Highways portfolio, especially in light of the positive policy changes undertaken by the Indian Government in the highway sector over the past year,” said Gautam Bhandari, director of Cube Highways and partner of I Squared Capital. “We continue to be in active discussions for controlling stakes in select transportation assets.”

“This corridor continues to see healthy traffic growth, demonstrating the correlation with the growing population, rapid urbanisation and widespread real estate and infrastructure development in the Delhi region,” added Harikishan Reddy, chief executive officer of Cube Highways Advisors. 

Cube Highways will operate close to 1,000 lane-km in India, including the latest acquisition. Its portfolio now comprises the Jaipur-to-Mahua and the Mahua-to-Bharatpur stretches of NH-11 in Rajasthan. 

Last year’s policy changes, which allow highway developers to fully divest their operating projects, have attracted private investors to the sector. Indian infrastructure developers are said by insiders to be eyeing exits from highways in a bid to monetise assets and repay debt.

In addition to I Squared, financial investors that have already expressed interest in Indian highways include IDFC Alternatives, Brookfield Asset Management and APG Asset Management.