Edelweiss AIF to deploy Rs 6.5k cr over 2 years; eyes road, energy assets

The fund has about Rs 13,000 crore, half of that about Rs 6,500 crore is still pending (aka still to be used). That will be utilised over two years

Edelweiss Alternative Investment Fund (AIF) will deploy Rs 6,500 crore over two years to acquire operating projects in two segments — roads and energy — before it begins to monetise its portfolio through sale to Infrastructure Investment Trusts (InVITs).

Subahoo Chordia, head of real assets strategy, Edelweiss Alternatives, said the projects that the fund can still acquire on roads and energy could be worth Rs 25,000 crore.  

The fund has about Rs 13,000 crore, and half of that — Rs 6,500 crore — is still pending. That will be utilised over two years. The fund will acquire assets, aggregate them and make them large cap, Chordia told Business Standard.

 

The fund can acquire 12-15 assets depending on the size. He said on the roads sector, broadly investors are looking for a mix of 50 per cent toll and 50 per cent annuity projects.

The fund was started with the idea to buy high-quality operating assets from construction companies or developers, segregate them into a larger portfolio, and then possibly look for an exit. 

One of the options is selling to InVITs and exit. Typically, the average holding period of assets is about four to five years, he said.

Earlier this month, Infrastructure Yield Plus Strategy Fund, managed by Edelweiss Alternatives, completed acquisition of 100 per cent stake in L&T Infrastructure Development Projects. It was held 51 per cent by Larsen & Toubro (L&T) and 49 per cent by Canada Pension Plan Investment Board.

The portfolio comprised seven operating roads and one power transmission asset in India, spanning 4,400 lane-km and 960 km, respectively.

With this acquisition, the infrastructure platform will scale up to 26 assets in 13 states.

It will comprise 5,000 lane-kms of roads, 1,800 kms of power transmission assets and 813 Mw of renewable power with cumulative annual revenue of Rs 3,000 crore.

The average pool size of highways InVIT in India is roughly about Rs 11,000-12,000 crore.

Edelweiss Alternatives had assets under management of $6.3 billion (over Rs 52,100 crore) as of December 2023.

Story so far

Edelweiss AIF raised Rs 30,090 cr as of Dec 2023
 

The deployment is Rs 22,400 cr as of Dec 2023
 

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