CDPQ Set to Acquire Ashoka Concessions’ BOT Toll Road Assets for ₹4,500 Crore

Canadian pension fund CDPQ is ready to purchase five build-operate-transfer (BOT) toll road assets from Ashoka Concessions, a subsidiary of highway builder Ashoka Buildcon, for an enterprise value of ₹4,500 crore. This deal comes after a year of negotiations and is expected to be signed this week, according to sources familiar with the situation. CDPQ will acquire these assets through its infrastructure trust, the Indian Highway Concession Trust (IHCT).

Currently, Ashoka Buildcon owns a 66% stake in Ashoka Concessions, while the remainder is held by SBI Macquarie. Macquarie invested ₹800 crore in Ashoka Concessions back in 2012 through the Macquarie-SBI Infrastructure Fund (MSIF).

CDPQ was in competition with UK-based Actis for these assets. Earlier, global investment firm KKR had planned to buy the BOT assets for ₹1,337 crore but dropped the deal in May last year. This led Ashoka Concessions to negotiate with various funds, including CDPQ, Actis, Sekura, and NIIF, starting in September 2023.

CDPQ’s Maple Highways platform, which focuses on the Indian road sector, is the sponsor of IHCT. This trust currently manages two assets: the Eastern Peripheral Expressway in the National Capital Region and the Shree Jagannath Expressway in Odisha.

All five toll projects under Ashoka Concessions are operational and have been tolling for an average of 10 years, demonstrating strong traffic density. In FY24, these projects reported a 12% increase in toll collections, amounting to ₹1,247 crore. This figure is expected to rise above ₹1,300 crore in the current fiscal year due to slight increases in toll rates and moderate traffic growth, as noted in a recent ICRA report.

CDPQ and Macquarie representatives declined to comment, and Ashoka Buildcon did not respond to inquiries.

Currently, the private investment office of the Suresh Kotak family, IIFL Group, and the Taparia family (founders of contraceptive maker Famy Care) collectively own about 25% of IHCT, with the rest held by CDPQ. While the Engineering, Procurement, and Construction (EPC) model remains popular for road awards, there is a gradual shift toward BOT (toll) projects, as indicated by ICRA in a report last month.