IRB Infra Trust makes non-binding offer to IRB InvIT Fund for 5 toll assets

IRB Infrastructure Trust has made a non biding offer to IRB InvIT Fund to transfer five toll assets having an enterprise value of Rs 15,000 crore as of September 2024, according to an exchange filing on Thursday.

In a statement, IRB said it plans to re-invest the proceeds raised from the deal in upcoming opportunities in the infrastructure sector.

IRB Infrastructure Trust is IRB Infrastructure and Developers' private InvIT (infrastructure investment trust) with 51 per cent stakeholding, while IRB InvIT Fund is a publicly listed InvIT platform in which the infrastructure player has a 15 per cent share.

"IRB Infrastructure Trust, an associate, has announced a non-binding offer to transfer five matured highway assets to the IRB InvIT Fund," IRB Infrastructure Developers Ltd (IRB) said in a statement.

The proposed transfer is subject to execution of definitive documents and the receipt of necessary approvals, the company said.

IRB along with the associate operates 17 toll assets. In October, it posted a 21 per cent rise in toll revenue to Rs 539.6 crore against Rs 447.8 crore in the same month in 2023.

IRB said as of September, the 5 assets valued at Rs 15,000 crore of enterprise value and the exact value at which these assets are proposed to be transferred to the public InvIT has not yet been determined.

It will be recorded in the definitive documents. These proceeds are expected to be reinvested into upcoming opportunities in the sector, including new BOT (Build-Operate-Transfer) and TOT (Toll-Operate-Transfer) projects at accretive returns.

Virendra D Mhaiskar, Chairman & Managing Director of IRB, said, "This transfer is a key step in our B.E.S.T (Bid, Execute, Stabilize & Transfer) strategy, under which projects are initially developed under our private InvIT platform. Upon their completion and stabilization, these assets are then offered to the Public InvIT platform."  He further added, "If completed, the transfer of these 5 assets to the Public InvIT will allow us to be self-sufficient in equity funding for upcoming sector opportunities that are being tendered by NHAI under TOT and BOT models. This is expected to drive significant growth, positioning our asset portfolio to reach Rs 1,10,000 crore in the coming years.