IRB raises Rs 5k cr from Spain’s Ferrovial, GIC

Mumbai: In one of the largest funding rounds in the road infra sector of the country, IRB Infrastructure Developers is raising Rs 5,347 crore from two large global investors. Spanish infrastructure major Ferrovial, the operator for London’s Heathrow and Glasgow airports, among others globally, is investing Rs 3,180 crore in IRB Infra to buy a 24.9% stake in the company.Additionally, Singapore’s GIC is investing Rs 2,167 crore to buy a 16.9% stake.
The funds will be raised through preferential offers to the two entities at a price of nearly Rs 212 per share, a company release said. IRB Infra is one of the leading road developers and toll road operators in the country. The Mumbai-Pune Expressway is one of the toll road highways that the company operates. It also has two infrastructure investment trusts (InvITs) — one publicly listed and another privately placed.
For the Spanish major Ferrovial, this is its first investment in India, being made through its arm Cintra INR Investments BV. GIC is the private investment firm of the government of Singapore, and is investing in IRB Infra through its arm Bricklayers Investment.
After the fund infusion, promoters’ stake in the company will come down to about 34% from 58.5% now, advisers to the deal said.
The funds raised from Ferrovial and GIC will be primarily used to retire IRB Infra’s debt aggregating Rs 3,250 crore. Of the balance Rs 2,097 crore, Rs 1,497 crore will be treated as growth capital, which will be used for current and future opportunities. The remaining Rs 600 crore will be used for general corporate purposes. The company also has plans to participate in the massive infrastructure development and monetisation plan of the government, the release said.
“IRB Infra’s execution capabilities, Cintra’s global best practices and technical prowess coupled with GIC’s backing as a long-term investor will be a launch pad for IRB to capture unprecedented growth in a capital-efficient manner,” the release said.
According to Shivam Bajaj, founder-director of Avener Capital, which was the sole adviser to IRB Infra for this fund-raising, the deal is a testimony of the stable policy regime and conducive business environment of the Indian infrastructure sector, which has perennially attracted large, patient, foreign capital from marquee global investors. “The infrastructure sector in India provides a great opportunity for new foreign infrastructure investors and operators to capitalise on the ambitious infra development plan unleashed by the government,” Bajaj said.