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Strategic Divestment to Unlock Value and Fuel Growth
PNC Infratech Ltd has successfully concluded a high-value transaction involving the transfer of its stake in the PNC Bareilly Nainital Highways Pvt. Ltd. to Vertis Infrastructure Trust. The deal, finalized at an enterprise value of 7.16 billion rupees, marks a significant milestone in the company’s asset monetization strategy. This move is expected to strengthen PNC’s balance sheet, improve cash flows, and support future infrastructure investments.
Key Highlights of the Transaction
- Enterprise value of the deal: 7.16 billion rupees
- Stake transferred: PNC Infratech and its subsidiary divested their entire holding in PNC Bareilly Nainital Highways Pvt. Ltd.
- Buyer: Vertis Infrastructure Trust, a registered InvIT focused on transportation assets
- Transaction includes debt assumption and equity transfer components
- Deal closed on August 1, 2025, following regulatory approvals and due diligence
Asset Profile: PNC Bareilly Nainital Highways Pvt. Ltd.
The divested asset is a key road infrastructure project in northern India.
- The highway spans approximately 80 kilometers, connecting Bareilly in Uttar Pradesh to Nainital in Uttarakhand
- Operated under the Hybrid Annuity Model (HAM), the project ensures semi-annual payments from the National Highways Authority of India (NHAI)
- The asset has been operational since 2023 and has demonstrated consistent traffic volumes and annuity inflows
- The project includes toll-free access, robust maintenance standards, and digital monitoring systems
Strategic Rationale and Financial Impact
PNC Infratech’s decision to divest aligns with its broader capital recycling strategy.
- The transaction unlocks capital tied up in mature assets, enabling reinvestment into new EPC and HAM projects
- The company expects to reduce consolidated debt and improve return on equity
- Proceeds from the deal may be used to bid for upcoming NHAI tenders and expand mining services operations
- The divestment supports PNC’s goal of maintaining an asset-light model while retaining execution capabilities
Market Reaction and Analyst Sentiment
The announcement has drawn positive attention from investors and market watchers.
- PNC Infratech’s stock (PNCINFRA.NS) rose 2.3 percent in intraday trading following the news
- Analysts at Kotak Institutional Equities and JM Financial have reiterated their buy ratings, citing strong fundamentals and asset monetization discipline
- The deal is expected to improve the company’s net debt-to-equity ratio and enhance free cash flow
- Institutional investors view the transaction as a signal of prudent capital management and strategic clarity
Vertis Infrastructure Trust: Expanding Portfolio Footprint
The acquisition marks a key addition to Vertis Infrastructure Trust’s growing portfolio.
- Vertis is focused on acquiring operational road assets with stable cash flows and long-term viability
- The trust is backed by a consortium of domestic and international institutional investors
- With this acquisition, Vertis strengthens its presence in North India and diversifies its annuity-based revenue streams
- The trust aims to list additional units on the NSE by Q4 FY26, leveraging its expanding asset base
Conclusion: A Win-Win for Infrastructure Growth and Financial Discipline
PNC Infratech’s stake transfer in the Bareilly-Nainital highway project to Vertis Infrastructure Trust underscores the evolving dynamics of India’s infrastructure financing landscape. By monetizing mature assets and reinvesting in growth opportunities, PNC is positioning itself for long-term success. Meanwhile, Vertis gains a high-quality operational asset that aligns with its investment thesis. The deal reflects a maturing market for infrastructure trusts and a growing appetite for strategic partnerships.
Source: Reuters India
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