GIC deal to boost 2019-20 bottom line by Rs 300 crore: IRB

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Published: October 24, 2019 2:24:56 AM

In terms of toll revenues, Yadav said IRB has seen a slowdown in traffic growth due to rainfall and floods during the quarter ended September 30, but he expects the growth to pick up during the festive season.

Yadav added that, several projects, including the Agra-Etawah project and three others in Rajasthan, which are under construction will make up for the revenue loss from Mumbai-Pune Expressway toll collections, once they become operational in FY21.

IRB Infrastructure Developers reported an increase of 15.7% year-on-year in its consolidated net profit at Rs 200.18 crore for the quarter ended September 30, 2019, boosted by a rise in construction segment revenue. Total income of the infrastructure company rose 21% y-o-y to Rs 1,801.07 crore.

However, the company’s revenues from build-operate-transfer (BOT) fell 16% y-o-y to Rs 415.75 crore during the quarter. Anil Yadav, CFO, IRB Infrastructure, said that the fall was on account of the expiry of the concession agreement for the Mumbai-Pune Expressway between the company and the National Highway Authority of India (NHAI) in August.  “The Mumbai-Pune Expressway was in our portfolio for only 14 days this quarter, which has led to the dip in the BOT revenue,” Yadav said.

The company, however, is not concerned over the bottom-line for the financial year as it expects the approval for the deal with Singapore sovereign wealth fund GIC to be in place by November-end. The company had in August announced that GIC will invest Rs 4,400 crore in its road assets. The investment is expected to deleverage IRB’s portfolio to the tune of Rs 2,000 crore.

“We expect to receive no-objection certificates from banks by November 15. Registration with the Securities and Exchange Board of India (Sebi) is also underway – We had applied and they have already sent their comments. We expect the NHAI clearance to come by the end of November. Once the deal is completed, it will result in roughly Rs 300 crore of interest savings, automatically, we expect the bottom-line to be boosted by Rs 300 crore (for FY20)” Yadav told FE.

Yadav added that, several projects, including the Agra-Etawah project and three others in Rajasthan, which are under construction will make up for the revenue loss from Mumbai-Pune Expressway toll collections, once they become operational in FY21. “We are expecting roughly Rs 2,100 crore of revenue from these projects (including the three projects in Rajasthan, one in Haryana, Agra-Etawah and Hapur-Moradabad) by FY21,” said Yadav.

The Mumbai-Pune Expressway, which is coming up for bidding early next month, has a “steep” asking price of close to Rs 9,000 crore, said Yadav. While IRB will bid for the project. “It is definitely not a compulsion for us that we have to get this project, since by FY21, we will be reaching a higher revenue compared with FY19,” said Yadav.

In terms of toll revenues, Yadav said IRB has seen a slowdown in traffic growth due to rainfall and floods during the quarter ended September 30, but he expects the growth to pick up during the festive season. “We have seen robust number beginning from October, and definitely expect healthy growth. We are keeping fingers crossed for a good growth in terms of revenue… we anticipate rough 5-6% traffic growth, 4.5% on account of inflation, leading to around 9% growth in revenue from toll collections in FY20,” Yadav said.

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