IRB Infra announces receipt of first tranche of Rs 3,753 cr from GIC

GIC will make these investments in lieu of units in a private InvIT that IRB Infrastructure has floated.
IRB Infrastructure Developers on Tuesday said its private infrastructure investment trust (InvIT) received the first tranche of investments from Singapore’s GIC, worth Rs 3,753 crore.

“IRB announces receipt of the first tranche of investment of Rs 3,753 crore from GIC affiliates out of its commitment of Rs 4,400 crore by IRB Infrastructure Trust,” the company said in a statement.

The remainder Rs 650 crore, the company said, will be invested in projects under construction. GIC will make these investments in lieu of units in a private InvIT that IRB Infrastructure has floated.  

The allotment of units, the company said, will happen by February 27. “After the allotment of units, IRB will hold 51 per cent and GIC affiliates will hold 49 per cent stake in the private InvIT,” said IRB’s media statement.  

As part of the transaction, IRB Infrastructure will transfer nine of its build-operate-transfer road assets to a private InvIT, in which IRB will hold controlling stake of 51 per cent. The nine road assets span across 5,900-lane km in Haryana, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, and Karnataka.

All nine assets are revenue-generating and on completion, will take the enterprise value of the private InvIT to Rs 22,500 crore. The company said this will be the biggest deal in the roads sector, based on the expected enterprise value of Rs 22,500 crore.

Bajaj Consultants acted as the exclusive financial advisor to IRB for the transaction. S&R Associates acted as legal advisor to IRB; Nishith Desai Associates acted as legal advisor to GIC affiliates.  

Ang Eng Seng, chief investment officer of infrastructure at GIC, said, “This platform will not only give us exposure to a large, well-positioned, and diversified portfolio of toll roads in India, but also enable IRB to continue growing its business. India remains a key long-term market for GIC, given its strong economic fundamentals and infrastructure development potential.”  

IRB plans to use the investment proceeds for deleveraging the portfolio and for equity funding for under-construction projects. In a separate announcement, IRB Infrastructure said it has received a letter of acceptance from Maharashtra State Road Development Corporation (MSRDC) to toll, operate, and maintain the Mumbai-Pune Expressway.

As part of the concession, IRB will pay MSRDC Rs 6,500 crore, and a staggered payment of Rs 50 crore in the second and third year, and another Rs 62 crore in the fourth year.

The concession, the company said, includes tolling, operations, and maintenance of both Mumbai-Pune Expressway and Old Mumbai-Pune Highway, for a concession span of 10 years and two months.

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