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GIP-Vinci nears first joint India roads deal

Global Infrastructure Partners (GIP) and Vinci Concessions are nearing a deal to buy a 207km tolled road In India from Kotak Investment Advisors, two sources familiar told Infralogic.

An agreement is likely to be signed in about two months, the sources said, without providing more details.

HKR Roadways has a concession through 2036 that comprises the four-lane Hyderabad-Karimnagar-Ramagundam stretch in Telangana state, awarded by the Andhra Pradesh Road Development Corporation.

The special project vehicle is 74%-owned by Kotak Special Situations Fund with the remaining held by the developer, Gayatri Highways.

Kotak effectively controls the entire shareholding as Gayatri’s stake is pledged to the fund.

Mumbai-based Kotak Investment Advisors acquired the stake in the highway asset in May 2021 after it provided INR 7.11bn (USD 85m) to its joint owners at the time – Gayatri Highways, Megha Engineering Infrastructure and DLF & Associates – so that they could settle the project debt.

The asset was classified by lead lender Canara Bank as a non-performing asset in 2019.

It owes INR 1.77bn (USD 21.2m) to lenders, according to a note by CARE Ratings in January this year.

Average daily toll collections have increased at a compounded annual growth rate of 10% since its inception in 2015, CARE said in the note. Led by passenger car unit growth of 15% and toll revision, collections rose 26% in the year through March 2023, compared with the previous 12 months.

The company has debt service reserves in the form of fixed deposit receipts of INR 124.7m, equivalent to one quarter of debt servicing.

Vinci and GIP declined to comment. Kotak did not respond to a request for comment.


[Editor’s note: The article has been updated post publication to note that GIP declined to comment.]