COMPETITION COMMISSION OF INDIA

(Combination Registration No. C-2023/01/999)

14th March 2023

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

CORAM:

Ms. Sangeeta Verma

Acting Chairperson

Mr. Bhagwant Singh Bishnoi

Member

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

1. On 30th January 2023, the Competition Commission of India (‘Commission’) received

a notice under Section 6(2) of the Competition Act, 2002 (‘Act’), jointly given by Epic
Concesiones Private Limited (ECPL) and Infrastructure Yield Plus II (IYP II)
[Hereinafter, ECPL and IYP II are collectively referred to as ‘Acquirers’]. The notice
was filed pursuant to the execution of (i) Securities Purchase Agreement, dated 16th
December 2022, entered amongst ECPL, L&T Infrastructure Development Projects
Limited (L&T IDPL/‘Target 1’), Larsen & Toubro Limited (‘Seller 1’), CPPIB India
Private Holdings Inc. (‘Seller 2’) (‘SPA 1’); and (ii) Securities Purchases Agreement,
dated 16th December 2022, entered amongst IYP II, L&T IDPL and Kudgi
Transmission Limited (KTL/‘Target 2’) (‘SPA 2’). [Hereinafter, Acquirers, L&T
IDPL and KTL are collectively referred to as ‘Parties’].

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2. The Proposed Combination is envisaged as follows:

Step 1: ECPL will acquire 51% and 49% of the equity share capital of L&T IDPL from
Seller 1 and Seller 2, respectively; and
Step 2: IYP II will acquire 100% of the equity share capital of KTL from L&T IDPL.

3. In terms of Regulation 14 of the Competition Commission of India (Procedure in

regard to the transaction of Business relating to Combinations) Regulations, 2011
(‘Combination Regulations’), vide letter dated 17th February 2023, certain
information and clarifications were sought from the Acquirers. The Acquirers
furnished their response vide submission dated 22nd February 2023. As the response
was incomplete, the Acquirers were required to provide complete information vide
letter dated 28th February 2023. The Acquirers furnished their response vide
submission dated 6th March 2023.

4. ECPL is a private limited company incorporated in 2022 and is wholly owned by IYP
II. ECPL proposes to provide, develop, own, maintain, operate, instruct, execute, carry
out, improve, construct, repair, work, administer, manage, control and transfer
infrastructure projects.

5. IYP II is a scheme of Infrastructure Yield 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 under the SEBI (Alternative Investment Funds)
Regulations, 2012. The investment manager and sponsor of IYP II is Edelweiss
Alternatives Asset Advisors Limited (EAAAL), which is an indirect wholly owned
subsidiary of Edelweiss Financial Services Limited (EFSL).

6. EFSL, the ultimate parent company of the Acquirers, is principally engaged in

providing investment banking services and holding company activities comprising
development, managerial and financial support to the business of the Edelweiss Group
(‘Acquirer Group’). Further, the Acquirer Group is primarily engaged in (i) agency

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business, which includes advisory and other fee-based services; (ii) capital business,
which includes lending business and other activities; (iii) life insurance and general
insurance business; (iv) asset reconstruction business; and (v) treasury business, which
includes income from trading activities.

7. L&T IDPL is involved in the business of development, operation and maintenance of

infrastructure projects under the Public Private Partnership model through its
subsidiaries. L&T IDPL is, inter alia, engaged in activities of developing, building,
tolling, operating and maintaining roads and highways and operating concessions
granted by governmental authorities through its core assets and relevant non-core
assets. L&T IDPL’s core assets are:
(i) L&T Deccan Tollway Limited;
(ii) Ahmedabad-Maliya Tollway Limited;
(iii) L&T Interstate Road Corridor Limited;
(iv) Panipat Elevated Corridor Limited;
(v) L&T Rajkot Vadinar Tollway Limited;
(vi) L&T Sambalpur Rourkela Tollway Limited;
(vii) L&T Samakhiali Gandhidham Tollway Limited;
(viii) L&T Transportation Infrastructure Limited;
(ix) Vadodara Bharuch Tollway Limited; and
(x) Watrak Infrastructure Private Limited
L&T IDPL’s relevant non-core assets are:
(i) PNG Tollway Limited; and
(ii) L&T Chennai-Tada Tollways Limited

8. KTL, a wholly owned subsidiary of L&T IDPL, is engaged in developing a

transmission system required for the evacuation of power.

9. Based on the business activities of the Parties (including their affiliates), it is observed
that these are broadly present in the (i) provision of operations and maintenance

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(O&M) of highways (provision of concessionaire services) in the road infrastructure

sector and (ii) power sector in India.

10. The Parties exhibit horizontal overlap in the market of O&M of highways (provision
of concessionaire services) in the road infrastructure sector in India through the
business activities of EFSL’s existing portfolio assets and L&T IDPL.

11. The Commission decided to leave the delineation of the relevant market open, as it was
observed that the Proposed Combination is not likely to cause an appreciable adverse
effect on competition in any of the relevant markets.

12. Based on the submissions of the Acquirers, it is observed that in the segment for O&M
of highways in the road infrastructure sector in India, the combined market shares of
the Parties (including EFSL’s existing portfolio assets) is [0–5]% and incremental
market share is also [0–5]% in terms of volume. Further, this segment is fragmented,
with several competitors such as IRB Group, Cube Highways Group, Oriental
Structural Engineers Group and Shrem InvIT.

13. Further, it is submitted in the notice that the existing road projects of ECPL and L&T
IDPL do not exhibit any overlaps. As all these road projects are unique, the relevant
geographic market may be considered the combination of a point of origin and point
of destination. In this regard, the Commission noted that each individual road project
operates in its confined geographical area catering to a different set of
users/commuters, thereby operating in a distinct market. Accordingly, there is no
horizontal overlap between these road projects.

14. With respect to the presence of the Parties in the power sector in India, the following
overlaps are identified:
(i) Horizontal overlap in the market for power transmission in India between KTL
and Acquirer Group through its portfolio entities Darbhanga-Motihari

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Transmission Company Limited (DMTCL) and NRSS XXXI (B)

Transmission Limited (NBTL);
(ii) Potential vertical overlap between the power generation business of Acquirer
Group [through its affiliates]1 (upstream market) and the power transmission
business of KTL (downstream market).

15. The Commission observed that the production/distribution chain of electricity consists
of three segments, i.e., generation, distribution and transmission, and that each of these
market segments has a distinct set of producers and consumers. Further, from a demand
substitutability point of view, switching can only take place internally within each
segment. Also, each segment of the electricity supply chain is characterised by
different competitive dynamics and governed by different regulatory frameworks.
Accordingly, generation, distribution and transmission of power may be delineated as
separate relevant product markets.

16. In relation to relevant geographic market, the Commission observed that the
regional power transmission grids have been synchronised by interconnection,
resulting in the operation of a national grid which serves as the single seamless network
for transmitting power across the nation. Thus, the relevant geographic market for both
power generation and transmission activities may be defined as the “entire territory of
India”.

17. However, precise definition of the relevant market is being left open, as the material
on record does not suggest that the Proposed Combination is likely to have any
appreciable adverse effect on competition in India.

18. With respect to the horizontal overlap, based on the submissions of the Acquirers, it is
observed that both the combined market shares and incremental market share of the
Parties in the sector for transmission of power in India is insignificant in terms of total
length of transmission lines. Further, with regard to vertical relationship, it is stated

1
13 power generating assets with an aggregate installed capacity of 1,145.51 megawatts.

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that the market share of the Acquirer Group in the power generation sector in India
(upstream) is insignificant and the market share of the Target in the transmission sector
in India (downstream) is also minuscule. Therefore, pursuant to the Proposed
Combination, it appears that there will be no ability or incentive to foreclose
competition in any market.

19. 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 any appreciable adverse effect on competition in India. Therefore, the
Commission approves the Proposed Combination under Section 31(1) of the Act.

20. The order may be revoked if, at any time, the information provided by the Acquirers is
found to be incorrect.

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

22. The Secretary is directed to communicate to the Acquirers accordingly.

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