IRB Infrastructure Developers Ltd. has secured the Hyderabad Outer Ring Road Toll-Operate-Transfer (TOT) project worth ?7,380 crore, which involves a 158-km expressway. The 30-year concession period deal is the second largest in the country, following the Mumbai-Pune Expressway project. This acquisition takes IRB's asset base to over Rs 70,000 crore, bolstering its position as India's largest private player in the TOT space. The company's shares surged 3.2% on the news, reflecting investor confidence in the firm's strategic growth trajectory.
IRB Infrastructure Developers Ltd., a leading entity in India's infrastructure sector, has made an impressive stride by securing the contract for the expansive 158-kilometer Hyderabad Outer Ring Road Toll-Operate-Transfer (TOT) project. The project is estimated to be worth a staggering Rs 7,380 crore. Last week, the company announced that this crucial project includes a revenue-linked concession period of 30 years, providing a long-term income stream.
In TOT contracts, a model that has gained considerable traction in recent years, existing road assets are handed over to a private player. In return for a fixed sum, the concessionaire is granted the right to collect tolls on the stretch for a predetermined period. This model is seen as a win-win, enabling the government to unlock the value of public infrastructure assets, while also giving private players a reliable, long-term investment.
Virendra D Mhaiskar, Chairman and Managing Director of IRB, expressed his delight over the development. He confirmed that this project would be executed through IRB’s private Infrastructure Investment Trust (InvIT) platform, which is designed to pool small or retail investments and deploy them in infrastructure projects.
Investors responded positively to the news, with IRB shares closing 3.2% higher on the BSE at ?27.15 last week. This project is second in terms of size only to the Mumbai Pune Expressway project, also a part of IRB’s portfolio, marking it as one of the largest single-asset TOT projects in the country. The awarding of this contract has significantly enhanced the company’s operations and maintenance (O&M) order book, which now stands at Rs 14,500 crore, marking a significant milestone in IRB's growth journey.
With the acquisition of this project, IRB Group’s portfolio (including private and public InvIT) now includes 24 road projects across the country, diversifying across 18 Build Operate Transfer (BOT), 2 Toll Operate Transfer (TOT), and 4 Hybrid Annuity Model (HAM) projects. The expansion of IRB's portfolio underlines the company's robust growth trajectory and its commitment to playing a significant role in developing the nation's infrastructure.
The Hyderabad Metropolitan Development Authority (HMDA) had invited global competitive bids for the project. Noteworthy contenders in the bidding process included Eagle Infra India Limited, Dinesh Chandra R Agrawal Infracon Private Ltd., and Gawar Construction Limited.
The Hyderabad Outer Ring Road (ORR) project involves the development of an 8-lane expressway that encircles the Hyderabad Capital City. Notably, a significant portion of the expressway, around 124 km, traverses through key urban nodes like Hi-Tech City, Nanakramguda Financial District, International Airport, IKP Knowledge Park, Hardware Park, Telangana State Police Academy, Singapore Financial District and Game Village.
The acquisition of the Hyderabad Outer Ring Road project marks a significant milestone for IRB Infrastructure Developers Ltd., further consolidating its position as a leading player in India's infrastructure sector. The project not only adds to the company's growing portfolio but also reinforces its commitment to the development of the nation's transport infrastructure. As the company gears up to execute this ambitious project, all eyes will be on the progress and the potential benefits it brings to the region.
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