• The proceeds will be
utilized to capitalize on upcoming opportunities in the Sector
• The proceeds from these 5
assets are expected to fund new road pipeline to the tune of up-to Rs. 30,000
Cr facilitating substantial growth and expansion
IRB Infrastructure Trust,
the Private InvIT, an associate of IRB Infrastructure Developers Limited,
India’s leading multinational transport infrastructure developer in the roads
and highways sector, has announced a non-binding offer to transfer five matured
highway assets to the IRB InvIT Fund, a publicly listed InvIT platform. The
proposed transfer is subject to, amongst others, execution of definitive
documents and the receipt of necessary approvals.
Commenting on the
development, Mr. Virendra D. Mhaiskar, Chairman & Managing Director of the
Sponsors, stated, “This transfer is a key step in our B.E.S.T (Bid, Execute,
Stabilize & Transfer) strategy, under which projects are initially
developed under our private InvIT platform. Upon their completion and
stabilization, these assets are then offered to the Public InvIT platform. This
process not only maximizes value for all stakeholders of the IRB Group but also
ensures sustained long-term benefits.”
He further added, “If
completed, the transfer of these 5 assets to the Public InvIT will allow us to
be self-sufficient in equity funding for upcoming sector opportunities that are
being tendered by NHAI under TOT and BOT models. This is expected to drive
significant growth, positioning our asset portfolio to reach Rs. 1,10,000
Crores in the coming years.”
As of Sep-24, the 5 assets
are valued at ~ Rs 15,000 Crores of enterprise value, as outlined in the
independent valuer's report of the Private InvIT. The exact value at which
these assets are proposed to be transferred to the Public InvIT has not yet
been determined and will be recorded in the definitive documents. These
proceeds are expected to be reinvested into upcoming opportunities in the
sector, including new BOT (Build-Operate-Transfer) and TOT
(Toll-Operate-Transfer) projects at accretive returns.
IRB Infrastructure
Developers will continue its role as the EPC (Engineering, Procurement, and
Construction) player and O&M (Operations and Maintenance) contractor for
all projects within both the Private InvIT and the Public InvIT, maintaining
its position as project manager.
Importantly, the B.E.S.T
growth strategy focuses on sourcing capital for growth through asset
monetization, and the transfer of assets from the Private InvIT to the Public
InvIT will not involve dilution of equity or increase in debt at the listed
company level. At the Private InvIT level, stabilized projects will provide
liquidity to bid for new opportunities without the need for additional equity
infusion.
For the Public InvIT, the
portfolio will expand with assets that have enhanced residual lives, further
solidifying its position as a robust investment platform.
