GMR Infrastructure’s Farukhnagar-Jadcherla highway project, Shapoorji-Pallonji’s Ulundurpet-Padalur stretch, and MVR Infra’s Omallur-Salem-Namakkal road project will see a change in ownership soon. Others could follow.
New investors have acquired a 74 per cent stake in these projects. Following the Cabinet Committee on Economic Affairs decision last Friday to relax exit norms for existing promoters, the new investors will now look to buy the entire stake.
Most of the acquisition contracts have a clause where the buyers have stated that a full buyout will happen as and when Government policy permits it, say officials from road development firms and the investment community.
For instance, IRB Infrastructure will now acquire the entire stake in MVR Infra’s Omallur-Salem-Namakkal project. IRB had acquired a 74 per cent stake in the project last year.
Speaking to Business Line, Virendra Mhaiskar, IRB Infrastructure’s Chairman and Managing Director, said: “The pricing for the remaining stake forms part of the contract that we entered while acquiring the 74 per cent stake last year.”
Similarly, there are two projects — one each by GMR Infrastructure and Shapoorji-Pallonji — where SBI Macquarie had acquired a 74 per cent stake earlier this year. It is now likely to buy the entire stake in these projects, say sources. There was, however, no official confirmation on this.
Trichy Tollway Pvt Ltd, which operates the Ulundurpet-Padalur stretch, was held jointly by Shapoorji-Pallonji and Malaysia-based IJM Corporation, in which SBI acquired a 74 per cent stake earlier this year.
Appointed date
The CCEA, while relaxing the norms, had said they will be applicable for existing projects where the “appointed date” has been achieved. The appointed date is the date from which the concession agreement starts.
For four- to six-lane projects, toll revenue starts flowing in from the appointed date, while in two- to four-lane projects, the toll collection starts after completion of construction.
The National Highways Authority of India (NHAI) will announce a policy defining the contours of the exit policy soon. Many developers said they want to wait for the announcement before predicting the impact.
The condition of new investors being subjected to due diligence by lenders appears to have made some investors uncomfortable. Others, however, say this is a fair condition as lenders put in 70-80 per cent of funds in these projects.
Besides, from a foreign investor’s perspective, the rupee’s depreciation has negatively impacted highway projects, which are high-value investments.
mamuni.das@thehindu.co.in