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IRB Infra dips 14% after NHAI explores new developer for Mumbai-Pune e-way

For IRB, during the fourth quarter of 2018-19, the Expressway project earned 42 per cent of the total toll collection.

SI Reporter  |  Mumbai 

IRB Infra skids 14% on back of heavy volumes; hits over 5-year low

Shares of skid 14 per cent on the BSE, to hit an over 5-year low of Rs 90 apiece, dragged by heavy selling pressure. The heavy sale volume was witnessed after a report said the National Highways Authority of India (NHAI) was planning to find a new operator for the afer the company’s agreement ends in August.

The scrip was trading at its lowest level since March 3, 2014. The trading volumes on the counter nearly tripled with a combined 10.83 million shares, representing 3 per cent of total equity of the company, changing hands on the NSE and BSE till 09:58 am.

SBI Capital has been mandated to find a buyer for the asset and feelers have been sent to global and domestic infrastructure developers such as Macquarie, Cube Highways and (NIIF), an Economic Times report said. All the developers have significant exposure in the toll roads segment.

In August 2004, the Maharashtra State Road Development Corporation (MSRDC) and Mhaiskar Infrastructure (MIPL) - an SPV of Developers signed a 15-year concession agreement to develop, operate and maintain the Mumbai-Pune section of NH-4, along with the operation and maintenance of the Expressway project. For IRB, during the fourth quarter of 2018-19, the Expressway project earned 42 per cent of the total toll collection.

Since May 27, the stock has underperformed the market by falling 34 per cent after the company posted 13 per cent year-on-year (YoY) decline in the net profit at Rs 208 crore in March quarter. EBITDA (earnings before interest, tax, depreciation and amortization) margin declined sharply by 865 basis points (bps) YoY to 39 per cent due to lower margin in the construction division. In comparison, the S&P BSE Sensex lost 1 per cent during the same period.

First Published: Wed, June 19 2019. 10:30 IST
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