Edelweiss Alternatives acquires L&T infra projects arm for ₹6,000 cr

Engineering and construction major Larsen & Toubro(L&T) has completed the divestment of L&T Infrastructure Development Projects Ltd (LTIDPL), its joint venture with Canada Pension Plan Investment Board (CPP Investments), in a deal pegged at ₹6,000 crore.

L&T's held 51% while CPP Investments held 49% shares in LTIDPL. Their stakes have been sold to Epic Concesiones Private Ltd, an investee company of Edelweiss Infrastructure Yield Plus Strategy, which is managed by Edelweiss Alternative Asset Advisers Ltd (EAA).

The LTIDPL has several road assets and power transmission lines under operation. According to Edelweiss Alternatives, the acquisition deal was worth ₹6,000 crore. The deal gives Epic Concesiones seven road assets of 4,400 km lane and a 960-circuit km power transmission line.

L&T, in an exchange filing, says, the deal is in line with L&T’s strategy to exit non-core businesses to reduce its exposure to the asset-heavy developmental projects portfolio, which would enhance its return on equity.

“This transaction marks the achievement of a significant milestone towards the execution of our strategic Lakshya 2026 plan and also provides a conducive environment for growth to L&T IDPL under Edelweiss Alternatives,” says D.K. Sen, advisor to CMD & head - Development Projects.

He adds a portfolio of good quality assets and a team of IDPL will add value to the Infrastructure Yield Strategy of the Edelweiss Alternatives platform going forward.

CCI approved the acquisition of 100% of the equity share capital of L&T Infrastructure Development Projects Limited by Epic Concesiones on March 15, 2023.

With these transactions, 14 companies have ceased to be subsidiaries of L&T. These include Ahmedabad-Maliya Tollway, L&T Deccan Tollways, L&T Interstate Road Corridor, L&T Rajkot-Vadinar Tollway, L&T Samakhiali Gandhidham Tollway, L&T Sambalpur Rourkela Tollway, L&T Transportation Infrastructure, L&T-Chennai Tada Tollway, Panipat Elevated Corridor, PNG Tollway, Vadodara Bharuch Tollway, Kudgi Transmission, Watrak Infrastructure, and Rewin Infrastructure.

L&T IDPL is involved in the business of development, operation, and maintenance of infrastructure projects under the Public Private Partnership model, through its subsidiaries. The subsidiaries enter into concession agreements with the National Highways Authority of India or state authorities and or transmission service agreements with power companies, for the development, operation and maintenance of infrastructure projects for a period ranging from 15 to 35 years. At the end of the relevant concession period, typically the entire facilities are transferred to the concerned government authorities.

The share of L&T closed 0.78% down to ₹3,754.95 on the BSE on Thursday.

Flagship company L&T's board, meanwhile, recently proposed to raise up to ₹7,500 crore through external commercial borrowings, term loans, non-convertible debentures, or any other instrument. In Q3 FY24, the consolidated profit of L&T stood at ₹2,947 crore, up 15% compared to the corresponding quarter of the previous year. The revenue stood at ₹55,128 crore in Q3 FY24, up 19%, aided by ramp-up in the execution of the strong order book in the projects and manufacturing portfolio.