Investor pays $375m for Indian concessions firm stake

The Xander Group has taken a 14% interest in HCC Concessions, a subsidiary of Indian developer HCC Infrastructure. The investee company has a portfolio of six concessions in India, including five toll roads.

Indian investment firm The Xander Group has paid Rs1,650 crore ($375 million) for a 14.5 percent stake in HCC Concessions, which designs, finances, builds and operates transport infrastructure in the Indian market.

HCC Concessions is a 100 percent subsidiary of developer HCC Infrastructure, which itself is a wholly owned subsidiary of Hindustan Construction Company. 

The firm has a $1.2 billion portfolio including six National Highways Association of India (NHAI) concessions. One of these, Nirmal in Andhra Pradesh, is an annuity project. The other five are toll roads: the Delhi Faridabad Elevated Expressway; the Dhule-Maharashtra/MP Border section of the NH3; and three sections of the NH34 in West Bengal.  

Of these, Nirmal and Delhi Faridabad are both operational, Dhule is expected to be commissioned later this year, while the three sections of the NH34 are said to be proceeding as planned. 

In a statement, HCC Concessions said it was projecting turnover of Rs500 crore by fiscal year 2014, with a free cash flow compound annual growth rate (CAGR) of more than 75 percent in the next five years. The projects in the portfolio have internal rates of return (IRRs) of between 17 and 25 percent over concession periods ranging from 18 to 30 years. 

HCC Infrastructure has built over 25 percent of India’s hydro power and 50 percent of its nuclear power generation capacity, 2,300km of roads and expressways, 170km of tunnelling as well as hundreds of bridges, dams and barrages. 

The Xander Group is an Indian investment firm focused on the infrastructure, hospitality, retail and real estate sectors. It has committed more than $1.8 billion of equity to the Indian market across five funds since 2005.