*IRB Infra - India’s largest toll road developer*
_*BUY for TP 550 - Bound to get Rerated*_
*BIGGEST DEVELOPMENT*
*Largest equity fund raise by a listed Indian infrastructure developer in the Roads and Highways Sector*
▪️Cintra INR Investments BV, a Subsidiary of Global infrastructure giant Ferrovial S.A would invest equity capital of up to INR 3,180 Cr for 24.9% stake in IRB
▪️GIC through its affiliate, would invest equity capital of up to INR 2,167 Cr into IRB for 16.9% stake
▪️These equity fund raises will help achieve the twin objectives of Deleveraging and Access to Growth Capital to participate in the massive infrastructure development and monetization plan of the Govt. of India
*These Transactions will result in a strong balance sheet as well as improved cashflows and profitability at IRB*
▫️It will result in Net Debt/EBITDA reduce from 2.1x to just 1.2x
▫️Interest Coverage Ratio will improve from 2x to 2.8x
*New entrants will provide Debt at very low interest rates*
*The National Infrastructure Pipeline has been subsumed under recently announced PM Gati Shakti Master Plan*
▪️Roads with 19% has received the lion’s share of allocation among infrastructure sectors
▪️20 Lakh Crore of Capex in the Roads Sector by FY25
▪️2 Lakh Kms of highway length to be achieved by FY25
*IRB has approx 20% share in India’s prestigious Golden Quadrilateral project, which is the largest by any private infrastructure developer in India.*
▪️The Company has strong track record of constructing over 13,095 lane Kms pan India in 2 decades and has an ability to construct over 500 Kms in a year.
*Considering the Stature of the new Investors, IRB is bound to get Rerated with much improved financials in the quarters to come.*
*_We advise a strong BUY for TP 550._*
_**Above TP is subject to market conditions. Personal due diligence advised_