Bharat Road Network eyes growth via acquisition, consolidation of stake in existing projects

Bharat Road Network is eyeing inorganic growth opportunities, either through acquisition of projects or consolidation of its stake in existing projects, the company said in its annual report.

Inorganic growth is when a company grows by external means such as merger, acquisition, and takeover etc.

In its 2018-19 report, the company said that through increased activity in the secondary market, it is continuously evaluating assets which are available at attractive valuation assuming such acquisitions are supported by sound strategic and financial objectives.

"The company has been able to consolidate its stake in one of its assets, Guruvayoor Infrastructure in Kerala, where... it acquired 73.98 per cent stake (acquisition of 26 per cent out of the 51 per cent stake is under progress) from its partner," it said.

Bharat Road Network said that it has created a platform where it expects to see a lot of consolidation happening.

It further said that Bharat Road Network is assessing commercial viability for bidding for primary market opportunities under Hybrid Annuity Model and Toll Operate Transfer (TOT).

"The company will continue to leverage its expertise in managing infrastructure assets under the PPP (public-private partnership) model to drive long-term growth," it said.

The company said that is exploring options for refinancing in various special-purpose vehicles (SPVs) to lower borrowing costs and improve cash flows.

"The priority for... the company is to continue its effort towards repricing and re-tenure its debt in all its assets. Though... the firm sources funding for existing projects primarily through long term loans from banks and other financial institutions, the company intends to continue to evaluate various funding mechanisms which will enable it to enhance credit rating and in turn reduce borrowing cost and improve liquidity," the report said.

Bharat Road Network is a road Build-Operate-Transfer (BOT) company focused on development, implementation, operation and maintenance of roads/highways projects.