IRB Infra to raise Rs 2,167 cr from GIC and Rs 3,180 cr from Cintra

On October 26, IRB Infrastructure Developers Limited announced that it has struck two individual equity fundraises via preferential allotments to Cintra, an arm of Spanish infrastructure major Ferrovial and Singapore’s GIC.

As per the agreement details, Cintra would invest equity capital of up to Rs 3,180 crore and would have a maximum stake of 24.9% in IRB post their investment. On the other hand, GIC (through its affiliate) would invest equity capital of around Rs 2,167 crore into IRB for a maximum stake of up to 16.9% in IRB after their investment.

The total investment proceeds to IRB from these investments will be a maximum of Rs 5,347 crore, making it the largest equity fundraising by a registered road and highway company. The issue value for both the preferential allotments is Rs 211.79 per share.

Virendra D. Mhaiskar, the founder promoter of IRB, will continue as the promoter and single largest shareholder after completion of the transactions with an estimated 34.0% stake and will hold on to the management control of IRB.

The two transactions are subject to the implementation of definitive documents, lenders approvals, receipt of regulatory approval, IRB shareholders’ approval and satisfaction of customary conditions.

The indicative usage of returns from the twin investments would be Rs 3,250 crore for deleveraging the Corporate Level Debt, Rs 1,497 crore for growth capital for current and future opportunities and Rs 600 crore for General Corporate Purposes.

In the eventuality that IRB is not able to issue shares to both investors concurrently (due to the timing of receipt of regulatory approvals of either investor being longer than the regulatory permissions for the other investor), the total investment would get decreased to Rs 4,307 crore to Rs 4,462 crore. The exact quantum will rely on which investor transaction is concluded earlier. Avener Capital Private Limited served as the exclusive financial advisor to IRB for the deal.

Virendra Mhaiskar, CMD – IRB Infrastructure Developers Ltd., told the media that through this investment, IRB would significantly benefit in terms of their global experience and best practices in the development, investment, and work of toll road projects.

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Also read: IRB Infra completes total fund raise of Rs 381.63 Crores