PNC Infratech Limited, a leading infrastructure development company, has successfully completed the sale of its equity stake in the PNC Bareilly Nainital Highways Private Limited, a Build-Operate-Transfer (BOT) toll road project. The transaction has been made to Vertis Infrastructure Trust (VIT), formerly known as Highways Infrastructure Trust. VIT is an Infrastructure Investment Trust (InvIT) sponsored by affiliates of KKR & Co. Inc, a globally recognized investment firm.

This marks a significant milestone in the company’s long-term strategic plan to monetise its operational road assets through trusted infrastructure partners. The completion of this deal on July 31 and August 1, 2025, is part of a multi-stage asset divestment exercise that began in early 2024.

Background of the Deal

Back in January 2024, PNC Infratech had announced a strategic agreement with VIT for the divestment of a portfolio of 12 road assets, comprising:

• 11 National Highway projects developed under the Hybrid Annuity Model (HAM)

• 1 State Highway BOT (Toll) project

These assets together constitute approximately 3,800 lane-km of road infrastructure spread across Uttar Pradesh, Madhya Pradesh, Karnataka, and Rajasthan.

The transaction was split into two tranches for efficient execution.

Tranche 1, concluded on May 22, 2025, involved the sale of 10 NH HAM assets.
Tranche 2, which has now been completed, involves the transfer of equity in the PNC Bareilly Nainital BOT project.

Financials of the Transaction

The total Enterprise Value of the deal stands at Rs 716.2 Crores, which is broken down as follows:

• Rs 153.48 Crore: Received against equity and debentures

• Rs 239.35 Crore: Received against unsecured loans

• An additional Rs 80 Crore: Expected in future as receivables, as per the terms of the definitive agreement

This infusion of liquidity will help PNC Infratech:

• Reinforce its balance sheet

• Pursue newer infrastructure development opportunities

• Meet its working capital needs

Significance of the Deal

This deal is significant for multiple reasons:

1. It reflects investor confidence in Indian road infrastructure, especially operational assets backed by reliable toll collections and annuity payments.

2. It validates PNC’s execution capabilities in large-scale national highway projects.

3. The strategic partnership with KKR-sponsored VIT signals growing interest from global infrastructure funds in India’s expanding transport sector.

Remaining Asset

Out of the 12 assets originally part of the agreement, 11 have now been divested. The final asset, namely PNC Challakere Karnataka Highways Private Limited, is expected to be transferred during the first half of FY26, pending fulfilment of specific Conditions Precedent mentioned in the agreement.

This final transfer will conclude PNC’s existing divestment agreement with VIT, freeing up resources and attention toward upcoming road development projects and tenders.

Industry Implications

The Indian government, through the National Highways Authority of India (NHAI) and Ministry of Road Transport and Highways, has increasingly encouraged infrastructure developers to monetise completed road assets via InvITs. This not only:

• Brings in institutional capital, but also

• Allows developers like PNC Infratech to rotate capital efficiently

For investors, such InvITs offer steady cash flows, while for developers, it’s an effective capital recycling mechanism.

Role of Infrastructure Investment Trusts (InvITs)

An InvIT like Vertis Infrastructure Trust pools money from multiple investors and invests in operational infrastructure assets. These trusts are regulated by SEBI, and their structure ensures:

• Transparency

• Stable returns for investors

• Long-term infrastructure financing for developers

With government support and global investor interest, InvITs have emerged as a crucial part of India’s infrastructure financing ecosystem.

About PNC Infratech

PNC Infratech Limited, founded in 1999, is one of India’s top infrastructure developers. With expertise across:

• Highways

• Bridges

• Airport runways

• Water supply projects,

the company has consistently executed projects under EPC, HAM, and BOT formats.

Its commitment to timely delivery, engineering excellence, and project safety has helped it earn a strong reputation in the infrastructure sector.

Future Outlook

With the proceeds from this deal, PNC is better placed to:

• Bid for new HAM and EPC contracts

• Enhance its cash flow and reduce leverage

• Focus on ongoing and upcoming infrastructure opportunities across India

This transaction will likely inspire other mid-sized infrastructure players to explore InvITs and monetisation opportunities in the maturing Indian infra landscape.

Conclusion

PNC Infratech’s successful divestment of 11 road assets underlines a growing trend in India’s infrastructure sector: collaboration between domestic developers and global investors via InvITs.

As PNC prepares to complete its final transfer in FY26, this milestone:

• Reinforces its leadership

• Strengthens investor confidence

• And demonstrates the maturity of India’s road development ecosystem

This divestment is not just a corporate development — it’s a reflection of India’s evolving infrastructure financing framework, and a strong signal for continued private sector participation in nation-building.

The Upcoming IPOs in this week and coming weeks are BLT Logistics, Bhadora Industries, Highway Infrastructure, Parth Electricals & Engineering, Jyoti Global Plast, Essex Marine, Aaradhya Disposal Industries.

The Current active IPO are Flysbs Aviation, Cash Ur Drive Marketing, Renol Polychem, B.D. Industries (Pune), NSDL, Takyon Networks, Mehul Colours, M&B Engineering, Sri Lotus Developers & Realty.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.