IRB Infrastructure’s trading debut is currently scheduled for Monday, February 25.
According to a source, the IRB Infrastructure IPO would have been valued at a 15%-20% discount to NAV (based on a sum-of-parts valuation) even at the top end of the price range, which made the bottom-end pricing quite attractive. Adding further to this, the company has a good chance of winning yet another large highway project from the government in the near-term. While IRB has yet to receive a formal letter of confirmation, it has been announced to be the highest bidder for the brownfield project which will involve widening the Surat to Dahisar section of National Highway 8 to six lanes from four. The construction is expected to take two to two and half years, but the company will have a right to 38% (and rising) of the toll revenues on the existing highway straight away.
The source notes that if confirmed, the Surat-Dahisar project will double the company’s current construction order book, which amounted to Rs23.2 billion ($585 million) at the end of October last year.