Madhucon plans to sell 74% stake in Agra–Jaipur Expressways project
The Hyderabad-based road developer, Madhucon Projects Ltd, plans to sell at least 74% stake in Madhucon Agra–Jaipur Expressways Ltd to IDFC Alternatives Ltd, the private equity (PE) arm of IDFC Ltd.
Madhucon Agra-Jaipur Expressways runs the along National Highway (NH) 11 and connects NH 8 with NH 2, which are part of the Golden Quadrilateral. The expressway connects Bharatpur with Mahua in Rajasthan. The project is on build-operate-transfer (BOT) model.
Tolling on the expressway commenced in May 2009 and the project has been awarded by the National Highway Authority of India (NHAI) with a concession period of 25 years starting 31 October 2005.
“Madhucon is looking to divest about 74% stake in the road asset (Agra-Jaipur Expressways). We are evaluating the proposal to invest in the project,” said a top official at IDFC Alternatives with the condition on anonymity. The valuation at which IDFC Alternatives will pick up stake in the project has not been ascertained. Srei Infrastructure Finance Ltd, which holds a minority stake in the road project, may also exit it as part of the transaction. “We hold about 7% stake in Agra-Jaipur Expressways. If there is a good deal on the table, we may look at clubbing our stake with that of Madhucon,” said a senior official at Srei, speaking on condition of anonymity. He added that Srei would abide by Madhucon’s decision on the stake sale.
According to Sandeep Upadhyay, senior vice-president (infrastructure solutions group), Centrum Capital Ltd, in addition to Madhucon Projects’ plan to sell stake in Agra-Jaipur Expressways comes there are nearly 50 roads projects are up for sale in the country. Delayed government approvals, problems related to land acquisition, and a funding crunch due to high borrowing costs have pushed a number of developers to monetize their assets.
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