Welspun Enterprises rallied 4.94% to Rs 105.10 after the company announced that it has executed definitive agreements to exit its portfolio of operating road concessions (Highway Portfolio) to Actis Highway Infra (Actis).
The company sold the portfolio for an aggregate enterprise value (EV) of approximately Rs 6,000 crore. The entire transaction is expected to be completed by 31 March 2023, subject to completion of customary and regulatory compliances and approvals from NHAI, PWD, and lenders.
The highway portfolio comprises of 5 completed hybrid annuity model (HAM) assets (Welspun Delhi Meerut Expressway, Welspun Road Infra, MBL (CGRG) Road, MBL (GSY) Road, Chikhali Tarsod Highways) and one operating build operate transfer- toll (BOT-Toll) asset (Welspun Infrafacility).
The enterprise value excludes construction linked milestone/ grant payments of approximately Rs 3,000 crore received/receivable from National Highways Authority of India (NHAI) and Public Works Department of Government of Maharashtra (PWD), thus, valuing the highway portfolio being exited at approximately Rs 9,000 crore.
The highway portfolio as on the date of first closing is expected to have a debt of Rs 3,627 crore and a total equity investment of Rs 1,613 crore.
Post this proposed exit, the company's road asset portfolio would comprise of two underconstruction HAM road projects (Sattanathapuram - Nagapattinam and Aunta - Simaria Road projects) which have a total project cost of Rs 3,900 crore. The company has a robust EPC order book of Rs 12,500 crore, comprising of Rs 6,500 crore in water sector and balance of Rs 6,000 crore in road sector, the company added.
Commenting on this development, B. K. Goenka, chairman, Welspun Group said, "This is a landmark moment for the company. We won India's first road HAM project in 2016 and during the last 5 years created a strong portfolio of over Rs 12,000 crore in the road sector and Rs 6,500 crore by way of EPC orders in the water sector, while leveraging our strong sector knowledge and experience. With this proposed transaction, we will deliver to our stakeholders the entire value chain of successfully winning-constructing-stabilizing-monetizing of road assets. Similarly, we will explore exiting the balance under-construction road assets and oil and gas assets at the right time and at the right value."
Actis is a leading global investor in sustainable infrastructure. It delivers competitive returns for institutional investors and measurable positive impact for countries, cities, and communities in which it operates.
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Welspun Enterprises part of the Welspun Group, is an operating company in the infrastructure business. The company's consolidated net profit surged 58.5% to Rs 64.53 crore on a 14.8% decline in net sales to Rs 484.63 crore in Q4 FY22 over Q4 FY21.
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