IRB Infrastructure gets Rs 3,753 crore in first tranche of investment from GIC

IRB Infrastructure on Tuesday announced the receipt of first tranche of investment totalling Rs 3,753 crore from GIC affiliates out of its commitment of Rs 4,400 crore by IRB Infrastructure Trust.

The balance commitment will be invested in construction of the under-construction projects. The allotment of units to investors will happen by February 27.

Post the allotment of units, IRB will hold 51 per cent and GIC affiliates will hold 49 per cent stake in the private InvIT.

"This is the largest transaction in the roads and highways sector in India," said the company in a statement. The net revenue of portfolio in FY 2019 was Rs 630 crore.

Upon completion of construction of nine build-operate-and-transfer (BOT) assets, the enterprise value of the private InvIT will be Rs 22,500 crore.

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

"It demonstrates the continued faith investors have in us and showcases our strength as a sector leader. We welcome GIC to the IRB family and look forward to growing this platform by exploring the future opportunities in roads and highways sector together," he said.

Ang Eng Seng, Chief Investment Officer of Infrastructure at GIC, said India remains a key long-term market for GIC given its strong economic fundamentals and infrastructure development potential.

"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," he added.

Bajaj Consultants acted as the exclusive financial advisor 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.

As part of the transaction, IRB will transfer nine of its BOT assets into a Private InvIT in which IRB will hold a controlling stake of 51 per cent. 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. As part of the transaction, GIC affiliates will invest up to Rs 4,400 crore. The investment proceeds will be used for deleveraging the portfolio and for equity funding for under-construction projects.

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