The Highways Infrastructure Trust (HIT), an infrastructure investment trust (InvIT) owned by KKR, has successfully acquired four road assets from Macquarie India in a deal worth Rs 30 billion. Adani Road Transport had previously agreed to purchase these road assets for Rs 31 billion but cancelled the deal last month, citing unsatisfactory terms.

In the recent acquisition, HIT will acquire Gujarat Road &Infrastructure (GRICL) and Swarna Tollway (STPL), both of which own two toll roads. Macquarie Asia Infrastructure Fund has a 56.8 percent stake in GRICL, with IL&FS owning 26.8 percent and the Government of Gujarat owning the remaining stake.

As of March 31, 2023, KKR holds an 89.99 per cent stake in HIT, while the Ontario Teachers' Pension Plan in Canada owns 7.51 per cent and the remainder is owned by other institutional and non-institutional shareholders.

Moreover, HIT is expected to win a 316km motorway asset through the ToT 12 auction by the National Highways Authority of India, as it has submitted the highest bid of Rs 41.81 billion. This auction covers only one road leg, from Lalitpur to Lakhnadon on NH26 in Madhya Pradesh, included in the 12th bundle of roads offered under the toll-operate-transfer deal.

Currently, HIT's portfolio consists of six road assets, totalling more than 450 km in Rajasthan, Gujarat, Madhya Pradesh, Meghalaya, Tamil Nadu and Telangana. Recently, HIT acquired the Navayuga Udupi Tollway, which operates a 90 km stretch of NH 66 in Karnataka. In May, HIT also acquired four projects under HG Infra Engineering's hybrid annuity model, totalling 100 km, in Haryana.

Upon completion of these deals, HIT's portfolio will expand to approximately 15 roads, totaling approximately 1,000 km.

According to a report by rating agency ICRA, road execution activity is expected to increase by 16-21 percent in FY24, with a length of 12,000-12,500 km, due to a healthy pipeline of projects, increased spending of government capital and a focus on project completion in the run-up to general elections. ICRA also expects tolls to grow by 6-9 percent in FY2024, supported primarily by a 4-5 percent increase in traffic.