IRB ties up US$ 867 million for Mumbai-Pune Expressway from SBI-led consortium

IRB Infrastructure Developers Ltd has tied up Rs 6,600 crore (US$ 936.30 million) of debt financing for acquiring tolling rights of the Mumbai-Pune Expressway, which it won through a bidding process in February 2020.

The IRB's 15-year tolling contract for the Mumbai-Pune Expressway expired in August 2019. IRB won the 10-year contract for a consideration of Rs 8,262 crore (US$ 1.17 billion) after multiple rounds of bid.

This fund was raised from a consortium led by the State Bank of India.

The payment of Rs 6,500 crore (US$ 922.12 million) to the Maharashtra State Road Development Corp (MSRDC) will be made by IRB.

"The first tranche of payment of Rs 6,500 crore (US$ 922.12 million) will be made to MSRDC today. The balance must be paid over multiple tranches over the next two-three years. They have raised the funds at interest rates of around 8-8.5 per cent," he said, adding that Bajaj Consultants advised IRB on the fundraise.

Mumbai-Pune Expressway was the first six-lane access controlled high speed toll road in the country.

"This is a tough market for toll roads as traffic has fallen due to the COVID-19 pandemic. Despite this the company has managed to tie up the funds, without requiring any extension for the financial closure," said the person related to the deal.

It is expected that the Mumbai-Pune Expressway will perform well given that it is major route that connects the two large metros.

Last year, Singapore’s sovereign wealth fund GIC had invested Rs 4,400 crore (US$ 624.20) in a road platform set up by IRB.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.