SAM Steers Oriental Engineers' Sale of Sohna Highway Asset to InfraTrust

New Delhi – In a significant transaction underscoring the dynamism of India's infrastructure sector, leading full-service law firm Shardul Amarchand Mangaldas & Co. (SAM) has successfully advised Oriental Structural Engineers Private Limited (OSEPL) on a strategic divestment. The deal involved the sale of OSEPL's entire 100% equity stake in its special purpose vehicle, Rajiv – Chowk (Sohna) Highway Private Limited, to the Oriental InfraTrust.

The transaction, dated October 15, 2025, represents a classic example of asset recycling, a crucial mechanism for fuelling sustained growth in the capital-intensive infrastructure domain. The asset at the heart of the deal is a key road project operating under the Hybrid Annuity Model (HAM), awarded by the National Highways Authority of India (NHAI).

The expert legal team from Shardul Amarchand Mangaldas & Co. that navigated the complexities of the deal was led by Partners Kushal Sinha and Dhrupad Pant. They were ably supported by a dedicated team comprising Paulose Abraham (Principal Associate), Pratyush Gupta (Associate), and Abhishek Choudhary (Associate).

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Strategic Significance: Asset Recycling and the InvIT Model

This divestment is more than a simple corporate share transfer; it is a strategic manoeuvre that highlights a mature and evolving infrastructure investment landscape in India. OSEPL, a prominent engineering, procurement, and construction (EPC) player, successfully developed and de-risked the highway asset, bringing it to a stable, revenue-generating stage. By divesting the operational project to Oriental InfraTrust, OSEPL effectively unlocks capital that can be redeployed into new, under-construction projects, thereby continuing the cycle of infrastructure development.

The buyer, Oriental InfraTrust, is an Infrastructure Investment Trust (InvIT). InvITs have become a preferred vehicle for housing operational infrastructure assets. Structured similarly to mutual funds, they pool capital from a diverse base of institutional and retail investors to acquire and manage income-generating assets. For investors, InvITs offer a unique opportunity to gain exposure to the stable, long-term cash flows characteristic of completed infrastructure projects, without the associated risks of greenfield development.

This transaction perfectly illustrates the symbiotic relationship between developers and long-term financial investors. Developers like OSEPL possess the technical expertise for project execution, while InvITs provide the long-term, patient capital required to hold these assets over their concession period. The legal framework governing this transfer, primarily the SEBI (Infrastructure Investment Trusts) Regulations, 2014, and the Indian Companies Act, 2013, ensures a regulated and transparent process for such asset monetisation.

The Hybrid Annuity Model (HAM): A Legal and Financial Deep Dive

Central to this deal is the nature of the underlying asset: a road project developed under the Hybrid Annuity Model. The HAM was introduced by the Indian government to rejuvenate infrastructure investment by balancing the risk allocation between the public and private sectors. Understanding its legal and financial structure is key to appreciating the transaction's complexity.

Under a typical HAM concession agreement with the NHAI, the government commits to funding 40% of the project cost during the construction phase, paid out in linked instalments. The remaining 60% is arranged by the private developer through a combination of debt and equity. This upfront public funding significantly reduces the developer's initial capital burden and eases financial closure.

Post-completion, the developer's return is not directly linked to toll collection volumes, mitigating traffic risk. Instead, the NHAI pays the developer a fixed, semi-annual annuity over the concession period (typically 15 years). This annuity comprises a return of the developer's 60% investment plus a margin. This structure provides a predictable, de-risked revenue stream, making HAM projects highly attractive assets for financial investors like InvITs.

The legal advisory on such a transaction, therefore, requires deep domain expertise. The SAM team's role would have extended beyond standard M&A due diligence to include a meticulous review of the concession agreement, financing documents, NHAI approvals, and compliance with the specific covenants related to a change in ownership. Ensuring the seamless transfer of all rights, obligations, and regulatory permits associated with the HAM project to the new owner, Oriental InfraTrust, would have been a critical aspect of the mandate.

Market Implications and Future Outlook

The successful completion of this deal sends a strong positive signal to the market. It validates the efficacy of both the HAM as a viable public-private partnership (PPP) model and the InvIT as an efficient vehicle for asset monetisation. For the legal community, this transaction reinforces the growing importance of specialised infrastructure M&A practices.

Law firms advising on such deals must possess a multi-disciplinary skill set, combining corporate law acumen with a granular understanding of project finance, regulatory frameworks specific to sectors like highways, and the nuances of capital market instruments like InvITs. As the government continues its push for infrastructure development through the National Infrastructure Pipeline (NIP), the volume of similar transactions is expected to increase.

We are likely to witness a continued trend of established EPC players monetising their completed project portfolios to fund their next wave of development. This creates a robust pipeline of de-risked, operational assets for domestic and international financial sponsors, including pension funds, sovereign wealth funds, and private equity firms operating through InvIT and REIT structures. Consequently, the demand for sophisticated legal counsel capable of navigating these intricate, high-value deals will remain exceptionally strong, making infrastructure law a key growth area for India's corporate law firms.