OMERS Infrastructure acquired a 22.4% stake in IndInfravit Trust, which holds a portfolio of five operational toll road concessions throughout India, for INR 8.7bn (USD 122.3m), a 22 February press release states.
L&T Infrastructure Development Projects Ltd (L&T IDPL), a subsidiary of Larsen & Toubro Ltd (L&T), built and operates the toll roads. L&T IDL is the INR 35bn (USD 500m) trust’s sponsor, and first floated it in May 2018 at which time money was raised through several private placements, local media reported.
IndInfravit is listed on the National Stock Exchange of India as well as Bombay Stock Exchange.
OMERS will join Canada Pension Plan Investment Board (30% stake), Allianz Capital Partners (25% stake), L&T IDPL (15% stake) as investors in the trust. The remaining units were subscribed by other local and international institutional investors in May 2018, according to local media reports.
The five roads operate in some of India’s most “economically vibrant states” and “support the country’s growing economy,” the press release states.
In early May 2018, L&T IDPL transferred the five roads to the IndInfravit Trust for INR 9.09bn (USD 127.8m), local media reported.
L&T IDPL develops roads under public-private partnership concession agreements with the central and state governments of India. It currently operates 17 infrastructure projects, of which, 15 are operational and two are under construction. It also operates 33 toll plazas across India, and plans to build five collection points within three years, according to local media reports.
“IndInfravit is a well-managed, world-class core infrastructure asset. This investment provides an attractive entry point into India, one of the most dynamic markets globally, alongside well-trusted partners,” Bruce Crane, OMERS Infrastructure managing director, who leads the firm’s efforts in Asia and moved to Singapore last year, said in the press release. “We look forward to working constructively with the other unitholders, management and all local stakeholders to grow this platform in the coming years.”
L&T IDPL also acts as the trust’s project manager while L&T acts as its investment manager, the press release states.
Mumbia, India-based L&T is one of the largest multi-national firms and construction companies in India.
“The investment in IndInfravit marks not only our first infrastructure investment in India, but also demonstrates our commitment to investing in the Asia Pacific region following our office opening in Singapore in 2018,” Ralph Berg, executive vice president and global head of OMERS Infrastructure, said in the press release.
“Our investment in IndInfravit aligns with our strategy to diversify our portfolio and generate value for OMERS plan members. At the same time, we will participate in the expansion of the Indian economy by investing into crucial infrastructure. Today’s announcement also represents an opportunity to deepen our relationships with ACP, CPPIB and L&T,” he added.