Kailash Sadangi says PPP assets need a different valuation model

Kailash Sadangi argues that concession and PPP assets are systematically mispriced when finance teams apply corporate valuation methods like standard DCFs and terminal multiples. He says the error matters more as global infrastructure investment, GCC project awards and institutional demand for long-duration assets continue to rise.

Why it matters: - Concession and PPP assets can be misvalued by hundreds of millions of dollars in enterprise value when teams use corporate finance tools that do not fit the asset structure. - The mismatch matters now because global infrastructure capital is expanding and institutional investors are actively looking for long-duration, inflation-linked cash flows. - The valuation gap can affect acquisition pricing, capital structure, refinancing decisions and shareholder returns across entire portfolios.

What happened: - Kailash Sadangi published a February 2026 paper, Concessional Business Valuation: A CFO's Perspective on a Different Kind of Value, arguing that concession assets should not be valued like conventional corporate assets. - Sadangi framed the issue around a warning from an infrastructure fund manager: "The concession life matters more than the terminal value." - Sadangi said the finance profession is systematically mispricing one of the most consequential asset classes in the world.

The details: - Global private participation in infrastructure investment reached $100.7 billion in 2024, up 16% from $87.1 billion in 2023, according to the World Bank PPI Database. - The global infrastructure finance market is $3.14 trillion and is projected to grow 7.2% annually through 2033, according to Dataintelo. - GCC project awards reached a record $273 billion in 2024, according to MEED. - Concession businesses sell availability, throughput or regulated services over contractual periods that can run 20 to 50 years. - Conventional EPC or contracting businesses are typically valued at 4–7x EV/EBITDA, while infrastructure concessions globally trade at 10–15x EV/EBITDA. - Digital infrastructure trades at 12–18x EV/EBITDA, according to the paper. - Recent private airport transactions have reached 23x EV/EBITDA, including AviAlliance's 2025 acquisition of AGS Airport Group, according to CBRE Investment Management. - Private cell tower portfolios have traded at 20x+ EV/EBITDA, according to CBRE Investment Management. - Unlisted airport transactions command a 34% premium over listed equivalents on average, according to Lazard Asset Management. - In concession projects, terminal value is typically zero because the asset reverts to the government at handback. - The paper says valuation models must explicitly cover each year of the concession, including lifecycle capex, regulatory resets, O&M escalation and refinancing risk. - In project finance, debt is usually raised through non-recourse or limited-recourse structures, with Debt Service Cover Ratios typically at 1.20–1.40x. - Sadangi said GCC concession businesses can also use Sukuk, Murabaha and Ijara structures to access regional liquidity. - He said ESG-linked financing can reduce all-in debt cost by 20–30 basis points over a 25-year concession life, lifting equity NAV.

Between the lines: - Sadangi's core argument is not that concession assets are more valuable in every case, but that they require a different financial lens because the cash flows, ownership structure and end-of-life economics are different. - The paper also pushes back on conservative valuation habits that may look prudent in corporate settings but can systematically understate long-duration infrastructure value. - The message is aimed squarely at CFOs and investors who still default to corporate multiples and terminal-value assumptions.

What's next: - Sadangi says the next step for finance leaders is to build the financial architecture, governance transparency, ESG credentials and investor narrative that let markets price these assets correctly. - He argues that organizations that develop that capability now will shape the next generation of infrastructure champions. - Organizations that do not, he says, will keep leaving value on the table one mispriced asset at a time.

The bottom line: - Concession and PPP assets are not perpetual corporate businesses, and Sadangi says valuing them as if they were can lead to major and avoidable mistakes. - Kailash Sadangi is a senior finance and governance professional with more than three decades of experience across the GCC, Asia-Pacific, Europe and Australia. - His background includes roles with Emerson, Terex, Drake and Scull International, Al-Muhaidib Group and Al-Othman Holding. - He is a DBA Researcher at Warwick Business School, holds MBA, Chartered Accountancy and CMA qualifications, and is a Certified Director from the GCC Board Directors Institute. - More information is available on LinkedIn and X.