Tatas all set to monetise road, ropeway projects; to raise Rs 6K crore

Tata Sons subsidiary, Tata Realty & Infrastructure, which commissioned two road and Dharamshala Ropeway projects recently, is planning to monetise these to raise funds, the company has informed its shareholders.

The unlisted real estate and infrastructure development company is also planning to raise Rs 6,000 crore by way of fresh debt to fund its new projects, including for Pune Metro project.  

TRIL constructed some of the major road projects in the Pune-Solapur stretch, Hampi Expressway and Udaipur-Chittorgarh section of the national highway apart from several housing projects in Gurgaon, Kochi and Nagpur and various commercial real estate projects in Gurgaon. The company did not give any indication on the valuation of the projects.

The Tata group is following several other companies, which are selling infrastructure projects, to raise cash. In August this year, Macquarie Asia Infrastructure Fund sold its road projects to Adani Road Transport (ARTL), a subsidiary of Adani Enterprises (AEL), at an enterprise valuation of Rs 3,110 crore. In the same month, National Investment and Infrastructure Fund acquired a 100 per cent equity stake in Shapoorji Pallonji Group’s SP Jammu Udhampur Highway at an enterprise value of Rs 2,291 crore.

In June, IndInfravit Trust agreed to buy the entire equity shareholding of five operational road projects from Brookfield’s funds at an enterprise value of approximately Rs 9,498 crore. In the same month, Actis, a leading global investor in sustainable infrastructure, acquired six operating highway toll road projects from Welspun Enterprises for an enterprise value of Rs 6,000 crore. Bankers said several other companies want to sell their road portfolio for retiring debt as well as raise cash for new projects.

Tata Realty, which made a profit of Rs 83.3 crore in the financial year ended March this year, has availed of Rs 4,220 crore of its borrowing limit as on June 30 this year. Once the company gets shareholders’ permission on September 14, it plans to tap the markets to raise debt via private placement of non-convertible debentures, the company said in its annual report.

Tata Realty did not comment on the sale or valuation of the infrastructure projects.

On the outlook for the real estate and infrastructure sector, the company said there were signs that there will be increased impetus to infrastructure development by the government, especially under the Parvatmala initiative for ropeways and large investment requirements. Tata Realty plans to focus on completing its existing projects and at the same time monetise its operational projects, the company said.

On a consolidated basis, the company said its operations witnessed a turnaround after Covid as its revenue for the 2022 fiscal year went up by 10 per cent to Rs 1,324.59 crore, as compared to the previous year's revenue of Rs 1,200.56 crore. The company made a profit of Rs 83 crore as compared to a loss of Rs 303.3 crore in FY21. 

As on March 31, 2022, the company’s debt was Rs 4,080 crore, an increase of Rs 1,035 crore over March 31, 2021. The company raised additional debt for repayment of existing loans in FY22. A part of the road projects sale will be used to retire debt.

Recent road transactions

August: Macquarie sells 2 road companies to Adani for Rs 3,110 crore

August: SP group sells Jammu Udhampur road project for Rs 2,291 crore

June: IndInfravit Trust buys three toll roads and two annuity roads, with about 2,400 lane km for Rs 9,480 crore

June: Welspun sells 6 road projects to Actis for Rs 6,000 crore