CPPIB-backed India infrastructure investment trust buys €845.4m roads portfolio

India’s first private infrastructure investment trust has agreed a INR66bn (€845.4m) deal to buy a roads portfolio from Sadbhav Infrastructure Project Limited (SIPL).

IndInfravit Trust, which is majority-owned by Canada Pension Plan Investment Board (CPPIB) and Allianz, is buying the entire equity shareholding in nine of SIPL’s operational road projects in a cash and share deal. 

The roads portfolio comprises seven toll roads and two annuity roads, with total 2,619km in Gujarat, Karnataka, Maharashtra, Rajasthan and Telangana.

Last year CPPIB invested C$200m (€134.6m) for 30% of IndInfravit and Allianz Capital Partners bought a 25% stake. L&T Infrastructure Development Projects (L&T IDPL), IndInfravit’s sponsor, held 15%.

The remaining stake is held by other local and international institutional investors including OMERS Infrastructure.

IndInfravit currently holds a portfolio of five operational toll road concessions and following the latest transaction, SIPL will own up to a 10% stake in IndInfravit.

CPPIB said it expects its financial commitment in connection with the proposed transaction to be up to C$220m.

Christian Fingerle, CIO at Allianz Capital Partners, said: “As a long-term investor, we are very glad that our customers can benefit from the growth potential of the Indian economy while contributing to its core infrastructure.

”We look forward to working jointly with our partners on these assets which are crucial for the economic and social development of the region and make a strategic fit to the diversification of our portfolio.”

Scott Lawrence, managing Director and Head of Infrastructure at CPPIB, said, “Our investment in IndInfravit Trust reflects our long-term confidence in the Indian infrastructure market and our belief in the ability of these toll roads to deliver strong risk-adjusted returns.

”The IndInfravit Trust, established by our investment partner L&TIDPL, was the first private InvIT of its kind in India, and we have been involved since its inception. We now look forward to the growth that is expected through our additional investment in these operating road assets.”