Actis LLP has rolled 11 road assets from two funds into an infrastructure investment trust valued at about ₹10,000 crore ($1 billion) after raising ₹1,180 crore from investors.
The road assets in Actis Long Life Infrastructure Fund 1 and 2 have been consolidated in the firm's NXT-Infra Trust, said Sumit Sen, managing director, long life infrastructure at Actis.
Following the fundraising, the private equity firm's stake in the trust has dropped to 71% from 86%, with the rest held by domestic investors, he said.
There is growing appetite for roads in India, where infrastructure funds and other long-term investors have been buying assets that offer regular revenue. Cube Highways and Infrastructure Pte acquired HKR Roadways-which operates a 206-km toll road in Telangana - for ₹1,650 crore.
Another deal saw Vinci Highways agree to buy Safeway Concessions' nine toll roads in Andhra Pradesh and Gujarat from Macquarie Asset Management Pty at a valuation of $1.7 billion.
A Macquarie fund also recently bought units of toll-road operator Maple Infrastructure Trust, while KKR-backed Vertis Infrastructure Trust is in the running to buy Megha Engineering and Infrastructure Ltd's road assets for $800 million.
"We see a deep infrastructure opportunity in the country, supported by established regulatory frameworks, which gives us confidence in taking a long-term view of the market," said Adrian Mucalov, managing director and head of long life infrastructure at Actis.
Buying already operating Indian roads offer attractive risk-adjusted returns, he said, adding that the trust will serve as a base for future acquisitions.
Other sectors such as digital infrastructure, electric vehicles, waste recycling and water services are attractive areas for potential investment, added Sen.
