Cintra, Ferrovial’s toll road subsidiary, has filed a bid to acquire up to 24.9% of Indian company IRB Infrastructure Developers, representing an investment of around 364 million euros. The deal will be conducted in the form of a preferential share issue. IRB Infrastructure Developers is a leading player in the Indian market, where it manages 23 projects and around 2,000 kilometers of toll road.
If the deal is completed, Cintra will become a key minority shareholder with representation on the Board. Completion is subject to Cintra, IRB Infrastructure Developers and Virendra D. Mhaiskar (and his family and holding company), IRB’s majority shareholder, executing a definitive agreement regarding the transaction, which must subsequently be approved by the company’s shareholders and cleared by the competent authorities and lenders. Final completion is projected to take place in the first quarter of 2022.
In the event the transaction is completed, a maximum stake of 24.90 % will not grant Cintra controlling rights over IRB Infrastructure Developers. Virendra D. Mhaiskar (and his family and holding company) will continue to be the single largest shareholder of IRB Infrastructure Developers and retain management control.
“This investment in IRB Infrastructure Developers represents a great opportunity for Cintra to expand into a new market for us — India — that has very promising fundamentals for toll road development. IRB has a portfolio of high-quality assets and a platform with the capability to capture some of the strong growth expected in this sector. Cintra would work with IRB to enhance its competitive position in the Indian market. Our international experience as an investor and operator would optimize IRB’s operational capacity and ESG compliance, a field in which Cintra and Ferrovial are international leaders,” said Andrés Sacristán, CEO of Cintra.
India: infrastructure plans
Infrastructure development plans have been multiplying in recent years, and the P3 model of public-private partnerships is expanding. Over 240 billion euros are expected to be invested in toll roads in 2022-2025, with privatizations set to exceed 18 billion euros, attracting a multitude of international financial and industrial investors.
IRB: concessions and construction
Founded in 1998, IRB Infrastructure Developers is listed on the Bombay Stock Exchange. It is one of India’s leading infrastructure companies and a pioneer in the industry, having developed the country’s first Build-Operate-Transfer (BOT) concession. It currently has 23 toll road projects in its portfolio, representing around 20% of the Golden Quadrilateral, a road network linking the country’s main economic development centers. Its assets include the Mumbai-Pune Expressway, one of India’s main highways. Last year it reported 630 million euros in revenue, and 310 million euros in EBITDA. Its business model integrates concessions and construction, and it has a very active presence in infrastructure development in India. Its construction division, which currently works exclusively on the company’s own concession projects, has built 14,000 kilometers of road.