Macquarie Shortlists Bidders for Sale of Indian Road Assets Valued Around Rs 9,500 Crore

Global infrastructure investor Macquarie Asset Management (MAM) has moved a step closer to selling its significant Indian road asset portfolio. Three main contenders have been shortlisted for the sale of its toll-operate-transfer (ToT) road assets: France-based VINCI Highways, Edelweiss-backed Sekura Roads, and KKR-backed Vertis Infrastructure Trust. Other firms that submitted non-binding offers include CPP Investments-owned Interise Trust, IRB Infrastructure, and Cube Highways. JP Morgan is advising Macquarie on this transaction.

The shortlisted bidders are expected to commence their due diligence processes shortly, with the submission of binding bids anticipated in the next few months. The current bids are reportedly in the region of Rs 9,500 crore, though Macquarie had initially aimed for an enterprise value of around Rs 10,000 crore when it officially launched the sale in September.

The portfolio includes nine toll road projects covering 648 km across Andhra Pradesh and Gujarat, managed under Macquarie's platform, Safeway Concessions Pvt Ltd. These assets generated approximately Rs 1,000 crore in toll revenue during the 2024-25 period. Macquarie had originally acquired these roads in 2018 for Rs 9,681 crore.

A major draw for potential buyers is the 30-year concession period, which offers strong long-term revenue visibility. The Andhra Pradesh segments are particularly lucrative, accounting for about 71% of total toll revenue and serving key ports and industrial hubs. The Gujarat roads provide access to important economic areas like Morbi and major ports such as Kandla and Mundra.

Impact: This significant divestment by Macquarie highlights the continued investor interest in India's road infrastructure sector. The sale process involves major global and domestic players, indicating a dynamic market for operational road assets. It could lead to increased competition and further consolidation in the Indian infrastructure space, potentially setting benchmarks for future transactions and impacting the valuations of similar assets. The successful completion of this deal will underscore the attractiveness of India's long-term infrastructure investment opportunities. Impact Rating: 7/10

Difficult Terms:

Toll-Operate-Transfer (ToT): A model where the government or a highway authority grants a private entity the right to operate and collect tolls on existing public roads for a specified period, in exchange for an upfront payment or a revenue share. Enterprise Value (EV): A measure of a company's total value, often used in acquisitions. It is calculated as market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents. Due Diligence: A comprehensive investigation and review of a business or asset by a prospective buyer or investor to confirm all facts and details before finalizing a transaction. Concession Period: The duration for which a private company is granted the right to operate a public infrastructure project (like a toll road) and collect revenue, as per an agreement with the government. Golden Quadrilateral: A major highway network in India connecting the four metropolitan cities of Delhi, Mumbai, Chennai, and Kolkata. Commercial Vehicles: Vehicles used for business purposes, such as trucks, buses, and vans, that transport goods or passengers.