I Squared Capital, through its ISQ Global Infrastructure Fund, has signed an agreement to acquire a 100 percent ownership interest in Jaipur Mahua Tollways Pvt. Ltd. (JMTPL), an operating toll road in India, from IJM Corporation.

The acquisition initially will be for a 74 percent ownership interest, with the remaining 26 percent subject to approval from the National Highways Authority of India (NHAI).

The toll road operates under a 25-year concession to toll, operate and maintain a 109 km stretch of National Highway 11 (NH11) in Rajasthan, India, and has been operational since 2009.

This transaction follows a recent US$20 million periodic maintenance program on the road. IJM had previously invested approximately US$50 million in equity and shareholder loans during the construction period.

This road stretch lies in the north-western Indian state of Rajasthan and is part of the highway connecting the two prominent cities of Jaipur and Agra. The toll road has seen a revenue growth of over 15 percent on an annualized basis for the past five years. Jaipur and Agra are both rapidly growing urban centers and are two of the most important tourist destinations in India, with populations of over 3.1 million and 1.7 million, respectively. Over 15 million passenger car units (PCUs) use the two toll plazas of this road on a combined basis annually.

Gautam Bhandari, Partner at I Squared Capital stated:

"This investment is based on a well-defined strategy of investing in select infrastructure assets that benefit from urbanization, a growing middle class and rising disposable incomes in growth economies. We believe Indian toll roads offer attractive risk-adjusted returns and provide direct exposure to the growing consumer economy. This was an exclusively negotiated transaction and we are very pleased to be working with a world-class engineering and construction company like IJM. We remain enthusiastic about investment opportunities in India, especially following the positive actions and policies being implemented by the new government."

Harsh Agrawal, Managing Director added:

"This road provides a critical direct link between two vibrant and growing urban centers and has a well-established operational history of over five years. The asset operates under a time-tested concession agreement framework with features like annual pass-through for inflation in toll rates. Separately, I Squared Capital continues to be in active discussions on multiple other acquisition opportunities as we look to build a portfolio of high quality highway and transportation infrastructure assets."