IRB Infra announces receipt of first tranche of Rs 3,753 cr from GIC

IRB Infrastructure Developers on Tuesday said its private infrastructure investment trust recieved the first tranche of investments from Singapore's GIC, worth Rs 3,753 crore.

"IRB announces receipt of the first tranche of the Investment of Rs 3,753 crore from GIC affiliates out of its commitment of Rs 4,400 crore by IRB Infrastructure Trust," the company said in its statement.

The remaining about Rs 650 crore, the company said will be invested in the progress of construction of the under-construction projects.

GIC will make these investments in lieu of units in a private infrastructure investment trust (InvIT) that IRB infrastructure has floated.

The allotment of units, the company said, will happen by February 27th, 2020. "Post the allotment of units, IRB will hold 51 per cent and GIC affiliates will hold 49 per cent stake in the Private InvIT," according to IRB's media statemnet.

As part of the transaction, IRB will transfer 9 of its build operate transfer (BoT) Road assets into a Private InvIT in which IRB will hold a controlling stake of 51 per cent. The Portfolio spans across 5,900-km in Haryana, Uttar Pradesh, Rajasthan & Gujarat, Maharashtra and Karnataka.

All 9 assets are revenue generating assets and on completion will take the enterprise value of the Private InvIT Rs 22,500 crore.

Bajaj Consultants acted as the exclusive financial advisor to IRB for the transaction. S&R Associates acted as the legal advisor to IRB and Nishith Desai Associates acted as the legal advisor to GIC affiliates.

Ang Eng Seng, Chief Investment Officer of Infrastructure at GIC, said “This platform will not only give us exposure to a large, well-positioned and diversified portfolio of toll roads in India, but also enable IRB to continue growing their business. India remains a key long-term market for GIC given its strong economic fundamentals and infrastructure development potential.”

IRB plans to use the investment proceeds for deleveraging the portfolio and for equity funding for under-construction projects.