A Road To Development: 2017 Will See Infrastructure Deals On The Surge

A number of deals in the infrastructure space have either been declared and will likely be finalised in 2017 according to certain analysts and investment bankers. Navneet Singh, executive director and head, infrastructure group, Avendus Capital stated:

…Within infrastructure, roads is a sector where one will see deal activity improving, primarily because there are multiple operating assets available for a transaction that do not have construction risks involved and thus have better appeal to a financial investor. Also, there are multiple buying platforms emerging apart from the existing road platforms, as financial investors will also become acquirers of road assets ….

About $3.78 billion was raised by the infrastructure sector in 2016 across 36 transactions. These include mergers and acquisitions (M&A), private equity (PE) investment and two initial public offerings (IPOs). This compares with $2.9 billion raised in 2014 and about $3.7 billion raised in 2015.

The aforementioned data comes from the analysis of monthly data from investment bank Equirus Capital Pvt. Ltd. According to data from Grant Thornton India, about $2.91 billion was raised from 39 M&A and PE transactions in 2016 across engineering, infrastructure, and clean-tech sectors.

The government is aiming to monetise 75 national highways operated by the National Highways Authority of India (NHAI) through international competitive bidding under the so-called TOT model, in which investors including foreign funds will participate.