Monday, July 22, 2024

IRB Infrastructure Arm Signs Rs 4,428 Crore Concession Agreement with NHAI

On November 28, IRB Infrastructure Developers witnessed a 3 percent decline in its shares following the signing of a concession agreement by its special purpose vehicle (SPV), IRB Lalitpur Tollway, with the National Highways Authority of India (NHAI). The SPV agreed to make an upfront payment of Rs 4,428 crore.

As of 1:30 pm, IRB Infrastructure Developers’ shares were trading at Rs 37.9 apiece, reflecting a 2.9 percent decrease from the previous session’s closing price on the NSE.

The concession agreement pertains to tolling, operation, maintenance, and transfer of the four-lane Lalitpur-Sagar-Lakhnadon section from the 99.005 km mark to the 415.089 km mark of NH-44 in Uttar Pradesh and Madhya Pradesh. This agreement operates on a Toll-Operate-Transfer (TOT) basis.

For the tolling and operation of the 316 km stretch, IRB Lalitpur Tollway committed to paying a concession fee of Rs 4,428 crore to NHAI for a revenue-linked concession period spanning 20 years. The concession terms include an annual tariff revision with a fixed raise of 3 percent per annum, along with 40 percent of the Wholesale Price Index (WPI).

IRB Infrastructure Trust was awarded this project on October 29, securing its position as the chosen bidder in the global competitive bids invited by NHAI.

IRB Infrastructure Developers is a leading integrated transport infrastructure developer in the roads and highways segment, holding the distinction of being the largest integrated private toll roads and highways infrastructure developer in India.

Although shares of the company have risen by 20.70 percent in 2023, outperforming the Nifty 50, which saw a 9 percent increase during the same period, the recent concession agreement triggered a 3 percent dip in share prices. As with any investment decision, users are advised to consult certified experts before making any financial commitments.

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