Roads, connecting remote areas and accounting for nearly 65% of freight movement, are in many ways the lifeline of India’s socio-economic development.
At IRB, our robust balance sheet strength, past track record and execution expertise enable us to get pre-qualified to bid for entire gamut of road development projects. However, we focus only on BOT projects that have the advantage of generating higher rate of return and are marked with low competition with very few players possessing necessary competencies to undertake large size and complex projects. Besides, BOT projects facilitate us in building a pipeline of income generating assets, which post stabilisation, can be offered to InvITs which enables us to realise value of investments which can be reinvested into new projects.
VALUE CREATION THROUGH BOT PROJECTS
Enhance revenue and profitability
BOT projects offer stable revenues from construction and better returns from tolls. Thus more such projects would enhance profitability both in absolute terms and in margins.
Perpetuity of InvIT
Strong pipeline of projects shall enable us to offer assets to InvIT while realising value of investment.
Nation grows
Availability of capital would enable us take on more infrastructure projects and contribute towards nation's development.
IRB’S EXPERTISE ACROSS BOT VALUE CHAIN
Project selection and bidding excellence
Our teams possess extensive understanding of projects which undertake detailed risk-returns, scientific and geographical analysis to determine the suitable projects that would generate higher internal rate of return with predictable risks. This enables the Team to submit bid on a competitive basis with higher possibilities of bagging the project.
Execution excellence
Years of experience, engineering expertise, equipment portfolio and skilled people enable us to deliver quality projects on time such that there are no cost-overruns and that tolling operations can commence on time.
Tolling expertise
Our robust tolling infrastructure, management and skilled people enable us to efficiently manage traffic such that we get the advantage of collecting tolls from maximum vehicles.
Infrastructure investment fund
We have the advantage of offering eligible operational projects to the InvIT.
IRB’s growth in tolling revenues
₹370Crs
in FY 2007-08
27%
CAGR
₹951Crs
in FY 2011-12
20%
CAGR
₹2,351Crs
in FY 2016-17
INDUSTRY OPPORTUNITY
With construction and project allocation in the road and highways sectors moving at a rapid pace, the segment is witnessing an unprecedented growth. In FY 2016-17, the government, despite falling short of its ambitious targets of constructing 15,000 km of roads and awarding 25,000 km of new highway project still managed to set an all-time high in these parameters by constructing 8,200 km of roads and awarding 14,000 km of new projects.
In its Union Budget 2017-18, the government has made its highest-ever allocation of ₹64,000 Crs to NHAI and another ₹27,000 Crs for the Pradhan Mantri Gram Sadak Yojana. Besides, with several initiatives undertaken by the government, various hurdles were cleared and projects are put on fast track.
In addition to this, the Ministry of Road Transport and Highways (MoRTH) intends to launch its ambitious mega project Bharatmala Pariyojana, an umbrella programme that shall focus on improving road connectivity to coastal areas, border areas, backward areas, religious destinations and tourist destinations at an estimated investment of ₹10 lakh Crs. Under the first phase of this project, a total of 29,000 km of highways (including economic corridor schemes, coastal and other roads) will be constructed.
