Tata Realty buys Agra-Jaipur expressway project from Madhucon Projects for Rs 250 crore
Following the announcement, shares of Madhucon Projects soared 14.96% to close at Rs 37.65 on the Bombay Stock Exchange on Tuesday.
By Rachita Prasad, ET Bureau | Updated:
MUMBAI: Hyderabad-based Madhucon Projects has signed an agreement to sell its Agra-Jaipur expressway project to Tata Realty and Infrastructure for Rs 250 crore, making it the second merger and acquisition deal in the roads sector this month.
Madhucon Projects informed stock exchanges that it has entered into an agreement to sell 74% stake in the project to Tata Realty and Infrastructure for an undisclosed amount.
NNageswara Rao, founder chairman of Madhucon Projects, told ET that the company will sell the entire 100% holding in the project once it receives government approval. The government allows only 74% stake sale in build-operate-transfer (BOT) projects. “We will be selling the entire 100% in the project forRs 250 crore. We hope to complete the deal in the next 60 days,” Rao said.
Following the announcement, shares of Madhucon Projects soared 14.96% to close at Rs 37.65 on the Bombay Stock Exchange on Tuesday.
Road developers have been on the lookout for divesting projects to raise funds to reduce their leverage and ease cash flows. Earlier this month, Ajit Gulabchandled HCC sold a highway project in Telangana to Highway Concession One for Rs 64 crore. IDFC Alternativesmanaged India Infrastructure Fund holds majority stake in the project. “The money that we raise will be used for our ongoing projects,” Rao said. Madhucon’s infrastructure development projects include four operational projects and three under construction projects. “Our strategy is to complete projects and then look for strategic investors for divestment. We are seeing a lot of interest from potential buyers for road projects,” Rao said.
The Agra-Jaipur expressway involved strengthening and widening of a 57-km stretch on NH-11 between Bharatpur and Mahwa. The stretch is operational and generating toll since May 2009. The NHAI awarded the project on BOT basis to Madhucon for a concession period of 25 years. “Infrastructure companies have debt piled up and they are looking to sell projects so that they can reduce the debt and be ready for the next round of projects when they are awarded,” said Ajay Garg, managing director at investment banking firm Equirus Capital, which was also an advisor to Madhucon.
Madhucon Projects informed stock exchanges that it has entered into an agreement to sell 74% stake in the project to Tata Realty and Infrastructure for an undisclosed amount.
NNageswara Rao, founder chairman of Madhucon Projects, told ET that the company will sell the entire 100% holding in the project once it receives government approval. The government allows only 74% stake sale in build-operate-transfer (BOT) projects. “We will be selling the entire 100% in the project forRs 250 crore. We hope to complete the deal in the next 60 days,” Rao said.
Following the announcement, shares of Madhucon Projects soared 14.96% to close at Rs 37.65 on the Bombay Stock Exchange on Tuesday.
Road developers have been on the lookout for divesting projects to raise funds to reduce their leverage and ease cash flows. Earlier this month, Ajit Gulabchandled HCC sold a highway project in Telangana to Highway Concession One for Rs 64 crore. IDFC Alternativesmanaged India Infrastructure Fund holds majority stake in the project. “The money that we raise will be used for our ongoing projects,” Rao said. Madhucon’s infrastructure development projects include four operational projects and three under construction projects. “Our strategy is to complete projects and then look for strategic investors for divestment. We are seeing a lot of interest from potential buyers for road projects,” Rao said.
The Agra-Jaipur expressway involved strengthening and widening of a 57-km stretch on NH-11 between Bharatpur and Mahwa. The stretch is operational and generating toll since May 2009. The NHAI awarded the project on BOT basis to Madhucon for a concession period of 25 years. “Infrastructure companies have debt piled up and they are looking to sell projects so that they can reduce the debt and be ready for the next round of projects when they are awarded,” said Ajay Garg, managing director at investment banking firm Equirus Capital, which was also an advisor to Madhucon.
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While some states were added on India's railway map for the first time in 2014, Mumbai saw multiple connectivity enhancements in terms of roads and metro connectivity. Yet another addition to India's infrastructure was the inauguration of the country's largest solar plant.
Railway lines, roadways, airports and metro connectivity - India's saw many major infrastructure developments in 2014. We take a look at twelve prominent ones:
