Approval of Combination involving Epic Concesiones 2 and Target SPVs

COMPETITION COMMISSION OF INDIA Combination Registration No. C-2025/02/1242

25^th March 2025

Notice under Section 6(2) of the Competition Act, 2002 given by Epic Concesiones 2 Private Limited and Infrastructure Yield Plus II & Infrastructure Yield Plus IIA

CORAM:

Ms. Ravneet Kaur
Chairperson

Mr. Anil Agrawal
Member

Ms. Sweta Kakkad
Member

Mr. Deepak Anurag
Member

Order under Section 31(1) of the Competition Act, 2002

1. On 12^th February 2025, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by Epic Concesiones 2 Private Limited (EC2PL/Acquirer), Infrastructure Yield Plus II (IYP II) & Infrastructure Yield Plus IIA (IYP IIA) (IYP II and IYP IIA are collectively referred to as ‘IYP’) acting through their investment manager, EAAA India Alternatives Limited (EIAL/Investment Manager) [collectively, ‘Notifying Parties’].

2. The Notice was filed pursuant to the execution of (i) Framework Agreement (Framework Agreement) dated 30^th December 2024 executed amongst Ashoka Buildcon Limited (ABL), Ashoka Concessions Limited (ACL) (ABL and ACL are collectively referred to as the ‘Sellers’], Target Special Purpose Vehicles (Target SPVs), EC2PL and IYP; (ii) Eleven (11) Securities Purchase Agreements each dated 30^th December 2024 executed amongst respective Sellers, EC2PL, IYP and each of the respective Target SPVs (SPAs).

3. The Proposed Transaction comprises proposed acquisition of 100% equity stake in the Target SPVs from their respective Sellers by EC2PL (Proposed Combination). Besides, as submitted, there are certain outstanding loans which the Target SPVs have availed from the Sellers which will be converted into non-convertible debentures (NCDs) and the same will be acquired by IYP II and IYP IIA (schemes of the Trust, acting through their Investment Manager) from the relevant Sellers.

4. In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024 (Combinations Regulations), vide letter dated 25^th February 2025, certain information and clarifications were sought from the Notifying Parties. The response to this letter was submitted by the Notifying Parties on 11^th March 2025 after seeking extension of time.

5. EC2PL/Acquirer is a private limited company and is an investee company of IYP. EC2PL proposes to provide, develop, own, maintain, operate, instruct, execute, carry out, improve, construct, repair, work, administer, manage, control, and transfer infrastructure projects. It is owned by IYP II and IYP IIA having shareholding of 70% and 30%, respectively.

6. IYP II and IYP IIA are schemes of the Trust, an irrevocable and determinate contributory investment trust under the Indian Trusts Act, 1882 and registered with the Securities and Exchange Board of India (SEBI) as a Category I – Infrastructure Alternative Investment Fund (AIF), under the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). IYP aim to provide investors an opportunity to earn returns based on long-term cash flows and growth through investments in infrastructure assets in India and primarily invest in securities of special purpose vehicles, or companies or units of infrastructure investment trusts or any other structure, for investment in infrastructure assets in accordance with AIF Regulations. The Investment Manager of IYP, i.e. EIAL, is an indirect wholly-owned subsidiary of Edelweiss Financial Services Limited (EFSL).

7. EFSL is the parent entity of the Acquirer and is principally engaged in providing investment banking services and holding company activities comprising development, managerial and financial support to the business of Acquirer group. EFSL is ultimately controlled by the persons forming part of the promoter group (Promoter Group) as identified under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018). Promoter Group, along with the downstream affiliates of the Promoters Group (including EFSL) are collectively referred to as the ‘Acquirers Group’. The Acquirer group is primarily engaged in: (a) Retail Credit (Home Loans, SME and Business Loans); (b) Asset Management (Mutual Funds and Alternative Assets); (c) Asset Reconstruction; and (d) Insurance (Life and General).

8. The Target SPVs comprise of eleven roads SPVs—seven (7) road SPVs wholly owned by ACL (along with its nominees) and four (4) road SPVs wholly owned by ABL (along with its nominees). The Target SPVs incorporated in India are engaged in the business of operating (through governmental concessions) roads and highways in India.

9. ABL is engaged in the business of construction of infrastructure facilities on an Engineering, Procurement and Construction basis (EPC) and Built, Operate and Transfer (BOT) basis and sale of ready-mix concrete. ABL has promoted SPVs for some of its projects wherein ‘toll collection rights’ are received in exchange for the construction cost.

10. ACL is a subsidiary company of ABL and is the infrastructure arm of the Ashoka group, floated for bringing under one umbrella - BOT road and highway projects. BOT includes annuity as well as toll.

11. For the purpose of overlap assessment, the activities of the Acquirer Group and Target SPVs have been considered by the Commission. The Target SPVs incorporated in India are engaged in the business of operating (through governmental concessions) roads and highways in India. Accordingly, the overlap assessment has been conducted by mapping and considering details pertaining to the road assets owned and operated by the Acquirer Group including its affiliates (EW Road Assets) vis – a – vis the Target SPVs proposed to be acquired.

12. Considering the nature and extent of aforesaid overlap and the competition assessment given in the subsequent paragraphs, the Commission observed that the Proposed Combination is not likely to cause a significant change in market dynamics in any of the plausible markets that could be delineated and accordingly, decided to keep the definition of relevant market open.

13. The Commission observed that in the past, it has considered horizontal overlaps in acquisition of road assets cases, on the basis of origin and destination (O&D) pairs. Based on that, there are no overlaps between the O&D pairs between the road assets that are operated and managed by the Acquirer Group’s Assets on one hand and the Target SPVs on the other. Further, it has also been observed that the road concessions in India are granted through a tender process whereby concessionaires are chosen through a bidding process who will build, develop and operate the road. However, considering that the Proposed Combination involves acquisition of the individual SPVs engaged in road/highway assets, the same is not likely to alter the bidding dynamics.

14. The Commission also considered pan-India presence of the Acquirer Group (including its affiliates) and the Target SPVs. However, their presence at different places/locations, does not have the effect of altering the competition dynamics in any manner.

15. As regards the operations and management (O&M) of highways in the road infrastructure sector in India, the Commission noted the submissions of the Acquirer that EW Road Assets only conduct O&M activities on a captive basis and do not provide O&M services in the open market to any third party and that the Target SPVs are not engaged in the provision of O&M services to road assets owned and operated by them and the respective Sellers provide O&M services to their respective Target SPVs. Thus, the competition dynamics of O&M segment as such would not be impacted by the Proposed Combination.

16. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

17. The order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.

18. The information provided by the Notifying Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

19. The Secretary is directed to communicate to the Notifying Parties accordingly.