Welspun Enterprises Ltd. will receive about Rs 2,339 crore from the first closing of the sale of six road assets to Actis Highway Infra Ltd., according to Managing Director Sandeep Garg.
“Enterprise value for the transaction is somewhere in the range of Rs 9,049 crore, out of which approximately Rs 3,000 crore were received by us during the construction phase from the client,” Garg, who is also the chief executive officer, told BQ Prime’s Sajeet Manghat.
The enterprise value is pegged at Rs 9,049 crore, and the asset being transferred will have a net value of about Rs 6,000 crore, Garg said.
In June, the company sold its road portfolio to Actis Highway Infra. The portfolios included five completed HAM assets and one operating BOT-Toll asset.
Under the HAM model, the government provides 40% of the project cost to the developer to start work, while the remaining investment has to be made by the developer.
The five projects are the Welspun Delhi-Meerut Expressway, Welspun Road Infra, MBL (CGRG) Road, MBL Road Ltd., and Chikhali Tarsod Highways.
The business environment for building roads will be less competitive, which will help the company make “better” margins, Garg said.
After this exit from the completed highway portfolio, the company’s road asset portfolio would only include two HAM road projects that are under construction and cost a total of Rs 3,900 crore, according to a filing with the stock exchange.
“On the waterside, I think the quantum of work that is unfolding is substantial, and we believe that that’s an EPC play that will be a very good play,” he said.
The company has an order book of Rs 6,000 crore for water infrastructure work.
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