IRB Gets First Tranche Of Investment Of Rs 3,753 Crore From GIC Affiliates
Virendra Mhaiskar, chairman and managing director of IRB Infrastructure Developers Ltd. (Photographer: Dhiraj Singh/Bloomberg)

IRB Gets First Tranche Of Investment Of Rs 3,753 Crore From GIC Affiliates

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IRB Infrastructure Developers Ltd. has received the first tranche of investment of Rs 3,753 crore from affiliates of Singapore’s sovereign fund GIC Pte Ltd., the highways operator and builder said on Tuesday.

The GIC affiliates have committed to invest up to Rs 4,400 crore in IRB. "The balance will be invested on the progress of construction of the under-construction projects," the road builder said in a filing to the stock exchanges.

IRB had in August 2019 signed definitive agreements with GIC affiliates for investment of up to Rs 4,400 crore—amounting to 49 percent stake—in a portfolio of nine of its assets through Private InvIT structure (IRB Infrastructure Trust). IRB will retain controlling stake of 51 percent in the trust.

The portfolio spans across 5,900 lane km in Haryana, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra and Karnataka. "All nine assets in the portfolio are revenue generating assets," the filing said.

The net revenue of the portfolio in 2018-19 was about Rs 630 crore. Upon completion of construction of the nine build-operate-transfer assets, the enterprise value of the IRB InvIT will be about Rs 22,500 crore.

"With this investment for the largest transaction in the roads and highways sector, a meaningful long-term relationship has been forged with GIC, one of the world's leading sovereign wealth funds," said Virendra Mhaiskar, chairman and managing director of IRB Infrastructure Developers.

The allotment of units to the investors will happen by Feb. 27, 2020. Post this, IRB will hold 51 percent and GIC affiliates will hold 49 percent stake in the Private InvIT.

"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," said Ang Eng Seng, chief investment officer (infrastructure) at GIC Pte Ltd. “India is a key long-term market for GIC given its strong economic fundamentals and infrastructure development potential.”

Bajaj Consultants Pvt. Ltd. acted as the exclusive financial adviser to IRB for the transaction.

S&R Associates acted as the legal advisor to IRB and Nishith Desai Associates acted as the legal advisor to GIC affiliates, the filing added.

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