New Delhi, Sept. 9 -- Kotak Alternate Asset Managers Ltd, the alternative asset management arm of the Kotak Mahindra Group, has sold its entire stake in HKR Roadways Ltd to private equity firm I Squared Capital-backed Cube Highways.
The investment firm said in a statement Wednesday it has realised Rs 1,650 crore (about $173.8 million at current forex rates) through distributions and the sale of its majority stake in the toll road operator. This is more than double the Rs 800 crore it spent to acquire a stake in HKR, stabilise its operations and transform the asset, it said.
The announcement comes about a week after Gayatri Highways Ltd said it had completed a previously announced agreement to sell its 49% stake in HKR Roadways to Cube Highways for Rs 57.32 crore.
HKR operates a 206-km four-lane toll highway in Telangana under a build-operate-transfer concession running through February 2041, with three toll plazas linking the state to Chhattisgarh, Maharashtra and north India.
The 25-year concession was originally awarded by the Andhra Pradesh Road Development Corporation, the predecessor to the present Telangana state highway authority, following the 2014 state bifurcation.
Commissioned in 2014, the project was hit by right-of-way delays and traffic well below forecasts, leaving pending capex and pushing it into non-performing status.
Kotak Alts had bought a stake in HKR Roadways through its special situations fund. The Kotak Special Situations Fund funded a one-time settlement with lenders led by Canara Bank - alongside Punjab National Bank, Union Bank of India, Indian Overseas Bank, Indian Bank, Bank of Baroda and India Infrastructure Finance Company - subject to a Swiss Challenge auction process, and acquired a stake in HKR from the Gayatri Group.
Kotak Alts said it completed the pending capex, carried out major road maintenance, modernised tolling infrastructure, implemented environmental and social measures and strengthened governance, helping the project reach final completion status and improve traffic and toll collections.
"HKR is a strong example of how patient capital, deep operational expertise and active asset management can unlock value in complex situations," said Rahul Chhaparwal, managing partner at Kotak Alts. "By working closely with stakeholders, we transformed a stressed infrastructure asset into a high-performing platform."
Pratik Parekh, partner at Kotak Alts, said the deal reflected the firm's ability to acquire and turn around distressed infrastructure assets through capital investment, governance enhancement and project-level execution.
Kotak Alts was established in 2005 and has raised, managed or advised more than $22 billion across private credit, real estate, real assets, private equity and investment advisory strategies.
Published by HT Digital Content Services with permission from VC Circle.