Neo Infrastructure Income Opportunities Fund (NIIOF), a SEBI-registered Category II Alternative Investment Fund (AIF), has signed definitive share purchase agreements with CDS Infra Projects Ltd (CDS) to completely acquire two operational road assets under NHAI’s Hybrid Annuity Model (HAM) for a total consideration of ₹1,500 crore.

Both the assets are located in the states of Haryana and Punjab and are a part of the 669 km 4-lane greenfield Delhi-Amritsar-Katra Expressway that is being built to connect Delhi to Katra (near Vaishno Devi) in Jammu & Kashmir with a spur leading to Amritsar.

Hybrid annuity roads have 15-year concessions with the National Highways Authority of India with contracted revenues independent of traffic volumes and hence are considered lower-risk investments.

NIIOF is Neo Asset Management’s flagship core infrastructure fund that is buying out de-risked, operational core infrastructure assets which provide steady and predictable cashflows, the company said. NIIOF is managed by Neo Asset Management (NAM), which currently manages multiple funds with a corpus exceeding ₹10,000 crore. NIIOF is an infrastructure buyout (infra-focused private equity) fund, presently in a mode of fund raising having a target corpus of ₹2,000 crore. The fund had achieved first close in September 2023.

CDS Infra Projects, the seller and developer of these assets, has a strong track record in executing large-scale infrastructure projects. The company is monetising completed assets to reinvest in future developments, ensuring continued growth and innovation in the sector.

Sandeep Chandra, Managing Director of CDS Infra, commented, “We are pleased to partner with Neo Infra Fund for the successful monetization of these high-quality road assets. At CDS Infra, our focus has always been on delivering world-class infrastructure projects, and this transaction will allow us to provide capital to new opportunities, further strengthening our development pipeline. We remain committed to contributing to India’s infrastructure growth and building enduring assets that serve the nation.”

Till date, CDS has executed more than 30 projects comprising 3,000 lane kms of highways and expressways across eight states in the country and is currently executing 5 more HAM assets to be developed by the next year.

“Our infrastructure fund is committed to channelling much needed investment into the country’s core infrastructure needs. This transaction is another one in this direction. Successful signing of SPAs for these assets highlights our ability to source high quality assets as well as foster our deep industry relationships and experience,” said Hemant Daga, CEO of Neo Asset Management.

“We are very excited to bring these marquee assets into our portfolio. Situated on one of India’s most significant expressways and built to the highest standards, they fit perfectly with our fund’s strategy of acquiring high-quality, long-term core infrastructure assets. We look forward to continuing our partnership with CDS and other industry leaders to add more such assets to our fund portfolio,” said Abishek Goel, MD & Head – Infra & Real Assets, and Saurabh Singhal, MD & Partner at NIIOF.