Massive Rs 9,270 Crore Highway Deal: NHAI Awards Major Project to IRB Infrastructure Trust!

Author

Satyam Jha | Whalesbook News Team

Detailed Coverage:

IRB Infrastructure Trust has been awarded a substantial package toll operate and transfer (TOT) project by the National Highways Authority of India (NHAI) in Uttar Pradesh. The deal is valued at an upfront consideration of Rs 9,270 crore and is part of NHAI's ongoing asset monetization strategy. This project encompasses a total of 366 km of vital highway stretches, specifically the Lucknow-Ayodhya-Gorakhpur corridor on NH-27 and a part of the Lucknow-Varanasi corridor on NH-731. IRB Infrastructure Trust will operate and maintain these roads for a revenue-linked concession period of 20 years. Virendra D Mhaiskar, Chairman & Managing Director of IRB Infrastructure Developers, highlighted the project's importance for the religious tourism corridor and stated that this award solidifies IRB's platform's commanding 42% market share in the TOT segment. IRB Infrastructure Trust is a private infrastructure investment trust (InvIT) sponsored by IRB Infrastructure Developers, which manages a vast asset base exceeding Rs 80,000 crore across India.

Impact: This award is a major win for IRB Infrastructure Trust, significantly bolstering its asset base, revenue visibility, and market leadership in the TOT segment. It strengthens IRB Infrastructure Developers' position as a key player in India's infrastructure development and provides a substantial boost to the Indian infrastructure sector by facilitating monetisation and development of critical road networks. Rating: 8/10

Difficult terms: Toll Operate and Transfer (TOT): A model where the National Highways Authority of India (NHAI) grants operational rights of existing toll-generating national highways to private players for a fixed concession period. The private entity pays an upfront fee to NHAI and is then responsible for toll collection and maintenance during the concession period. Infrastructure Investment Trust (InvIT): A collective investment scheme similar to a mutual fund, which owns income-generating infrastructure assets. InvITs allow investors to invest in large-scale infrastructure projects and receive periodic income from them. Asset Monetization Programme: A government strategy aimed at unlocking the value of underutilized or unutilized public sector assets by selling, leasing, or securitizing them. The generated capital is then reinvested in new infrastructure development.