IRB Infra shares rise 7% in trade; what's driving investors' interest?

The buying on the counter came after IRB Infrastructure Trust, the Private InvIT sponsored by IRB Infrastructure Developers, received a LoA from the National Highways Authority of India

IRB Infrastructure Developers shares spiked 7 per cent on BSE, logging an intra-day high at ₹45.93 per share. At 10:54 AM, IRB Infrastructure Developers' share price was up 5.06 per cent on BSE at ₹45.08 per share. In comparison, the BSE Sensex was up 0.11 per cent at 

84,656.59.

 

The market capitalisation of the company stood at ₹27,223.81 crore. The 52-week high was at ₹61.98 per share, and the 52-week low was at ₹40.54.  

Why were IRB Infrastructure Developers' shares in demand?

The buying on the counter came after IRB Infrastructure Trust, the Private InvIT sponsored by IRB Infrastructure Developers, received a letter of award (LoA) from the National Highways Authority of India (NHAI) for the TOT-17 bundle covering 366 kms of the Lucknow-Ayodhya-Gorakhpur Corridor on NH-27 and part of the Lucknow-Varanasi Corridor on NH-731, for a revenue-linked concession period of 20 years.

 

"We are pleased to inform that IRB Infrastructure Trust (the “Trust”) has emerged as the Selected Bidder and received the Letter of Award from National Highways Authority of India (NHAI) for the project involving Tolling, Operation, Maintenance and Transfer of Lucknow-Ayodhya Section of NH-28 (New NH-27) from km 15.400 to km 137.970, Ayodhya-Gorakhpur Section (Km. 136.759 to Km. 252.860) stretch of NH-28 (New NH-27) and Lucknow-Sultanpur Section of NH-731 from Km. 90.370 to km. 217.795 in the state of Uttar Pradesh (TOT 17) (the “Project”)," the filing read. 

 

According to the filing, the Trust will pay an upfront Bid Concession Fee of ₹9,270 crore to NHAI for revenue-linked concession period of 20 years.

 

Annual tariff revision is fixed at 3 per cent per annum plus 40 per cent of Wholesale Price Index (WPI). Tolling and operation, and maintenance (O&M) activity will commence from the appointed date. Trust’s asset portfolio will increase by 20 per cent to ₹65,000 crore with the addition of this project, with a long-term revenue and cash flow generation visibility.

 

IRB Infrastructure Developers Ltd will be the project manager for the contract.

 

IRB Infrastructure Developers Ltd (IRB) is an integrated multi-national transport infrastructure developer in roads and highways segment. As the largest integrated private toll roads and highways infrastructure developer in India, IRB has an asset base of over ₹80,000 crore in 12 states across the parent company and two InvITs, excluding TOT 17.