IRB Infra bags ₹1,683-cr contract from NHAI; stock surges 6%

Shares of IRB Infrastructure surged as much as 6.33% to ₹42.47 apiece on the BSE today after the company announced that it had secured a project from the National Highways Authority of India (NHAI). In contrast to this, the broader BSE Sensex was trading 0.24% or 168.66 lower at 71,315.09.

IRB Infrastructure Trust, a private Infrastructure Investment Trust (InvIT), has been granted the Letter of Award (LoA) from NHAI for the TOT-13 project, encompassing the Gwalior-Jhansi section on NH-44 and Kota Bypass on NH 76 projects. The contract amounts to ₹1,683 crore, with a revenue-linked concession period extending over 20 years. This award elevates IRB Infra's Asset Base to around ₹77,000 crore, solidifying its substantial market share in the TOT sector at around 38%, the company states via an exchange filing.

The issuance of the LoA will now empower the Trust to establish a Project Special Purpose Vehicle (SPV) for the execution of the Concession Agreement with the Nodal Agency. Subsequently, the company will move forward with financial closure within the specified time frame, as stated in its regulatory filing.

Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers Ltd. said, “Receiving LoA is next important step on way to signing Concession Agreement, which will enable us to proceed to comply with various other formalities, including financial closure for the project that will facilitate timely takeover of the project.”

“This project will take our share in the North South connectivity to approx. 12%; our aggregate asset base to nearly ₹77,000 crs. with a robust market share in TOT space to around 38%, the largest by any private transport infrastructure developer in roads and highways segments in India,” Mhaiskar adds.

To emphasise, around six weeks ago, IRB Infrastructure Trust had obtained the LoA from NHAI for TOT-12 (Lalitpur-Lakhnadon section on NH44). The upfront consideration for this award amounted to ₹4,428 cr., with a revenue linked concession period extending over 20 years from the appointed date, it mentions.

In the first week of December, IRB Infrastructure Developers Limited, along with the IRB Infrastructure Trust (Private InvIT), reported a combined toll collection of ₹437 crore in November 2023. This marked a notable YoY growth of approximately 20%, compared to the toll collection of ₹366 crore in the same month of 2022.

Shri Amitabh Murarka, Dy CEO of the Company says, “We have witnessed a continued rise in toll collection, despite Diwali holidays, which briefly slowed down momentum of economic activities across the Nation for almost a week’s time. Overall, it’s promising to see the persistent growth momentum gained in the first eight months of FY24. The second half of the year is always better from Toll Collection perspective; accordingly, we expect the growth momentum to continue, especially with Gujarat BOT commencing tolling soon.”