Indian infrastructure giant GMR has decided to sell a majority stake in its road project GMR Ulundurpet Expressways (GUEL) to India Infrastructure Fund (IIF), which is managed by IDFC Alternatives, for Rs2.22bn ($35.1m).

In line with its Asset Right and Asset Light Strategy, GMR Highways has entered into a definitive agreement with IIF to divest a 74% stake in GUEL.

The deal, which represents GMR’s second major divestment in less than six months, is subject to closing conditions customary to such transactions.

GMR Group CFO Madhu Terdal said that the transaction signifies GMR Group’s ability to successfully implement its Asset-Light-Asset-Right strategy under challenging market conditions.

"We at GMR Group continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets," Terdal added.

"GMR Highways has entered into a definitive agreement with IIF to divest a 74% stake in GUEL."

The latest divestment will reduce GMR’s debt on 31 August 2013 by Rs4.59bn ($72.6m) on a fully consolidated basis, along with infusing equity funds of Rs2.22bn ($35.1m).

GUEL, which commenced commercial operations in July 2009, operates a 73km-long highway stretch, from Tindivanam to Ulundurpet on National Highway 45 in the state of Tamil Nadu.

IDFC Alternatives managing partner and CEO M. K. Sinha said that this investment is the company’s first major acquisition and a step in the direction of implementing our road sector strategy of acquiring control of operational projects with proven traffic history.

"Given the uncertainty and delays in implementing under construction projects, we will continue our focus on acquisition of operating road assets.

"This investment also reinforces our desire to stick to partners with whom IDFC has proven and long-standing relationships like the GMR Group and we look forward to continue working with GMR in building and operating quality infrastructure assets in India," Sinha added.