CDPQ to buy Ashoka's BOT toll road assets for Rs 4,500 crore

After a year of negotiations, Canadian pension fund CDPQ is set to acquire five build-operate-transfer (BOT) toll road assets of Ashoka Concessions, a subsidiary of highway builder Ashoka Buildcon, for an enterprise value of ₹4,500 crore, said people aware of the matter.

The deal will be signed this week, the people said, adding the assets will be bought by CDPQ through its infrastructure trust-Indian Highway Concession Trust (IHCT).

Parent Ashoka Buildcon currently has a 66% stake in Ashoka Concessions with the rest held by SBI Macquarie. Macquarie had invested ₹800 crore in Ashoka Concessions in 2012 through the Macquarie-SBI Infrastructure Fund (MSIF).

CDPQ and UK-based Actis were in the final race for the assets, ET first reported in December.

Global investment firm KKR had initially agreed to buy the BoT assets for a total of ₹1,337 crore. However, KKR abandoned the deal in May last year, leading Ashoka Concessions to initiate talks with various funds such as CDPQ, Actis, Sekura and NIIF in September 2023.

Maple Highways-CDPQ's platform for the Indian road sector-is the sponsor of IHCT which houses two assets-the Eastern Peripheral Expressway in the National Capital Region under ToT7, and Shree Jagannath Expressways in Odisha.

All the five toll projects under Ashoka Concessions are operational and have an average tolling track record of 10 years with established traffic density. In FY24, the toll projects reported 12% growth in collections at ₹1,247 crore. Toll collections are expected to rise to more than ₹1,300 crore this fiscal, driven by a modest rise in toll rates and moderate traffic growth, according to a recent ICRA report.

Spokespeople for CDPQ and Macquarie declined to comment. Ashoka Buildcon did not respond to ET's queries.

At present, the private investment office of Suresh Kotak family, IIFL group, and Taparia family-the founding family of contraceptive maker Famy Care-are among five investors who collectively own about 25% stake in IHCT. The remaining stake is held by CDPQ.

While EPC (Engineering, Procurement and. Construction) is likely to remain the preferred route for road awards by the ministry, it is gradually shifting its focus to BOT (toll) projects, ICRA said in a report last month.