IRB may raise up to Rs1,200 crore

IRB Infrastructure Developers, the Mumbai-based highway builder, may raise up to Rs1,200 crore to fund its projects.

Virendra D Mhaiskar, IRB’s chaiman & managing director, said the company’s board has passed an enabling resolution to raise Rs1,200 crore. “We have not decided how much we have to raise now or the instruments to be used,” he said on a conference call on Tuesday.

The company will convene an extraordinary general meeting on November 25 to seek shareholder approval for the fund mop-up.

IRB is one of the country’s largest highway developers with 16 projects covering a total length of 1,124 km in operation and various stages of development. It earns toll revenues of Rs2.5 crore per day.

The company bagged four build-operate-transfer (BOT) projects in the second quarter together worth Rs4,300 crore. The projects include the Rs800 crore Panji-Goa/Karnataka border, Rs1,200 crore Amritsar-Pathankot, Rs 800 crore Talegaon-Amravati and Rs1,500 crore Jaipur-Deoli projects.

 “We would get an NHAI (National Highways Authority of India) grant of Rs800 crore for these projects,” Mhaiskar said, adding the company would need to infuse equity of Rs1,000 crore in these projects over 3-4 years.

“We have strong cash flows to fund one or two more projects,” Mhaiskar said. IRB has a cash of Rs 468 crore and debt of Rs2,600 crore on its books.

IRB has pre-qualified for NHAI and state highway projects worth Rs 25,000 crore.
“We would be submitting bids in the next 6-8 months,” chief operating officer Dhananjay K Joshi said.

Mhaiskar said the company is hopeful of achieving financial closure for the four projects by April. IRB has received the letters of acceptance (LoA) for all projects except the Panji-Goa/Karnataka border project.

In the second quarter, IRB forayed into airport development with a Rs150 crore greenfield airport project in the Sindhudurg district in Maharashtra.

Mhaiskar said the company began tolling on the Bharuch-Surat stretch in September.
IRB does the contracting work for its road projects itself. Its current order-book stands at Rs9,900 crore, out of which Rs 7,600 crore is in engineering, procurement and construction (EPC) and Rs2,300 crore in operation and maintenance.

For the second quarter ended September 30, IRB’s net profit and topline jumped 80% and 73% to Rs 74.31 crore and Rs209.78 crore, respectively.