One of the leading road and highway developing companies in India, IRB Infrastructure Developers Ltd has announced the receipt of the first tranche of the investment of Rs 3753 crores from GIC affiliates out of its commitment of INR 4,400 crores by IRB Infrastructure Trust. The balance commitment will be invested on the progress of construction of the under-construction projects.
By 27 Feb, 2020, allotment of the units will be ensured to the investors. After that, IRB will hold 51 per cent, while GIC affiliates will hold 49 per cent stake in the private InvIT. This is the largest transaction in the roads and highway sector in India.
The net revenue of the portfolio was INR 630 crores in FY 2019. The enterprise value of the private InvIT will be INR 22,500 crores upon the completion of construction of 9 BOT assets.
Talking about the development, Mr Virendra D Mhaiskar, Chairman and Managing Director of IRB Infrastructure said, “With this investment for the largest transaction in the roads and highways sector, a meaningful long-term association has been forged with GIC, one of the world’s leading Sovereign Wealth Funds. It demonstrates the continued faith investors have in us and showcases our strength as a sector leader.”
“We welcome GIC to the IRB family and look forward to growing this platform by exploring the future opportunities in the roads and highways sector together,” he added.
On the other hand, Mr. Ang Eng Seng, Chief Investment Officer of Infrastructure at GIC said “We are pleased to partner IRB, one of India’s largest private road and highway developers, in this investment. This platform will not only give us exposure to a large, well-positioned and diversified portfolio of toll roads in India, but also enable IRB to continue growing their business. India remains a key long-term market for GIC given its strong economic fundamentals and infrastructure development potential.”
Bajaj Consultants Private Limited acted as the exclusive financial advisor to IRB for the transaction, while S&R Associates and Nishith Desai Associates acted as the legal advisors to IRB Infra and GIC affiliates respectively.
About the Transaction
IRB will transfer 9 of its BOT assets (“Portfolio”) into a Private InvIT as part of the transaction, in which IRB will hold a controlling stake of 51 per cent. The Portfolio spans across 5,900 lane kms in Haryana, Uttar Pradesh, Rajasthan & Gujarat, Maharashtra and Karnataka. All 9 assets in the Portfolio are revenue generating assets. GIC affiliates will invest up to c. INR 4,400 crores as part of the transaction. The investment proceeds will be used for deleveraging the portfolio and for equity funding for under- construction projects.