Alternative Investment

The Capital Quest | KKR rolls out $520 mn infrastructure investment vehicle in India

Global alternative investment firm KKR said Monday it has launched Highways Infrastructure Trust (HIT), a roads infrastructure investment trust (InvIT), its third such infrastructure vehicle in the country as it broadens its private equity investment play in India.

KKR’s other InvITs include Virescent Renewable Energy Trust, India’s first renewable energy InvIT, and India Grid Trust, a power transmission InvIT. Together, these platforms operate and manage 33 assets valued at over $3.8 billion across 22 states or union territories across India, KKR said.

HIT’s initial offering by way of a fresh issue of 41.6 million units through a private placement aggregate to Rs 416 crore ($52 million). In total, at the issue price, the InvIT is valued at $520 million. The issue is managed by Axis Capital and the units will be listed on the National Stock Exchange.

HIT’s initial portfolio comprises six road assets with a total length of more than 450 km across six states in India. The assets, which include a mix of toll and annuity roads, are located in Gujarat, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu and Telangana.

In addition, HIT is considering a pipeline of acquisition targets, including through its sponsor KKR.

HIT’s launch takes place on the back of growing demand to expand India’s road network, the second-largest globally, as passenger traffic and commercial vehicle traffic continue to increase. Currently, India’s road network is responsible for 90% of total passenger traffic and the movement of almost 65% of all goods across the country.

Hardik Shah, Partner at KKR, said, “Highways and roads play a critical role in driving India’s economic prosperity and connecting its citizens, and we look forward to enabling further infrastructure creation and expansion as transportation demands continue to grow.”

Globally, KKR’s infrastructure portfolio spans a broad range of sectors including transportation, renewable energy, power and utilities, water and wastewater, and telecommunications, among others, and manages more than $40 billion in assets.

In India, KKR sees transportation, renewable energy, and electricity transmissions as core to its infrastructure strategy. Since setting up its Mumbai office in 2009, KKR has made more than 20 investments in India with more than a dozen active portfolio companies today.

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