IFCI to offload 26% stake in toll road in MP

IFCI seems to be on drive to liquidate non-core investments to unlock value in assets

IFCI Ltd, the government-owned finance company, seems to be on drive to liquidate non-core investments to unlock value in assets.

After deciding to reduce holding in National Stock Exchange and sale broking unit, now intends to put on block its 26% stake in a Rs 900-crore operating toll road project in Madhya Pradesh.

IFCI will engage the services of an independent consultant to carry out estimation of tollable traffic. The consultant would also conduct valuation of the equity shares of Jaora Nayagaon Toll Road Company Private Limited (JTCL).   

IFCI holds 26% of the equity shares in JTCL. Other key stakeholders include Srei Venture Capital Trust (33.98% stake) and Ashoka Concessions Ltd (23%).

IFC managing director and chief executive officer Malay Mukherjee said finance company expects to complete process by September.

Last week, IFCI, had informed stock exchange about plans to reduce its stake in the National Stock Exchange (NSE). It also  intends to divest entire holding in the broking and financial product distribution arm, IFCI Financial Services Ltd (IFIN).

IFCI is not going to exit from investments in haste. It has comfortable capital adequacy for support business growth. The strategy is to divest stake in non-core assets in phases, Mukherjee said.

The projects for four-laning of Jaora–Nayagaon road in Madhya Pradesh was awarded to JTCL on Build-Operate and Transfer basis in August 2007. The project has a Concession Period of 25 years (Till August 2032). The Project Road passes through three districts - Ratlam, Mandsaur and Neemach – in the state.

It starts at Jaora at km 125.00 and ends at Nayagaon at MP/Rajasthan border at km 252.7. The project road has three sections -- (i) Jaora to Mandsaur, (ii) Mandsaur to Neemuch and (iii) Neemuch to Nayagaon. They were commissioned in February 2012.

The company reported net sales of Rs 126.69 crore in 2013-14 up from Rs 109.05 crore in 2012-13. The net loss was Rs 25.33 crore in March 2014 as against Rs 21.95 crore in 2012-13, according to report by rating agency Brickworks.