Corporate Feature     

Published: Jan 15, 2023
Updated: Jan 15, 2023

IRB Infrastructure: Emerging giant of road infra

The first Indian MNC in the highway construction segment, IRB Infra is one of the largest players in its field and currently has 3,500 lane km operational and 2,350 lane km under development. Its landmark projects include the Mumbai-Pune Expressway and the Ahmedabad-Vadodara Expressway. In 2012, the company acquired TN-based road builder MVR Infrastructure and Tollways for Rs 130 crore. It has also bagged 3 out of 12 packages of the ambitious Ganga Expressway in Uttar Pradesh. Giving a thumbs up to the company on the debt and revenue aspects, Kotak Securities has given a ‘buy’ call on IRB Infra with a target price of Rs 340 over a one-year period.

Kotak Securities, an equity research and stock market trading wing of the prestigious Kotak Mahindra group, has given a ‘buy’ call on the BSE- and NSE-listed IRB Infrastructure Developers Ltd – the first Indian multinational player in the highway construction segment. The Mumbai-headquartered company is headed by Virendra Dattatray Mhaisk.

A part of the IRB group, the company was ranked 200th in the Fortune India 500 list in 2020. The company, which executed the country’s first build-operatetransfer (BOT) road project, is one of the largest operators in such ventures. Currently, it has about 3,500 lane km operational and about 2,350 lane km under development. Among its notable projects are the MumbaiPune Expressway and the Ahmedabad-Vadodara Expressway. In 2012, the company acquired Tamil Nadubased BOT road builder MVR Infrastructure and Tollways for Rs 130 crore. The company also bagged the contract for 3 out of 12 packages of the Ganga Expressway – the longest under-construction expressway in Uttar Pradesh.

Analysing the company’s performance, Kotak Securities mentioned in its pick of the company that IRB is emerging as a platform for road assets, with funding from GIC and Cintra, with a portfolio of toll projects, a construction arm and growth capital for funding new projects.

BUMPER ORDERS

The EPC arm of IRB is better placed than its peers on a strong order book, despite weak inflows so far from NHAL.

Kotak Securities further expects the company’s consolidated debt to come down from the current levels on debt repayment and new projects being taken under private InVIT, and said, “Revenue viability remains strong with an order book of Rs 20,000 crore adjusted with GST.”

IRB Infra has announced that its special purpose vehicle (SPV) – Udaipur Tollway Limited – has raised Rs 700 crore through the issuance of redeemable non-convertible debentures on a private placement basis.

According to a statement, the SPV will use the proceeds to refinance the existing project debts.

Little wonder then that Kotak Securities has given a buy call on IRB Infra with a target price of Rs 340 over a period of one year.