IRB Infra - On A Strong Footing: Motilal Oswal

Motilal Oswal Report

We interacted with the management of IRB Infrastructure Developers Ltd. to gauge its strategy after the fund raise in FY22.

The management touched upon various aspects like:

1. the huge growth opportunity in the roads and highways segment;

2. more projects being bid out through the built-operate-transfer toll route; and

3. reducing competitive intensity in road tenders and steps taken by National Highway Authority of India to manage its finances.

Here are the key takeaways from that interaction:

• Unlike most contractors, IRB Infra have not ventured into other Infra verticals. It sees ample opportunities in the road segment itself and continues to bid for projects in this segment. In terms of preference, BOT toll projects will be preferred, followed by toll-operate-transfer and hybrid annuity projects.

• As per IRB Infra, none of the other Infra verticals cover inflation risk better than roads. Also, regulatory and technology risk is much lower in roads as compared to other verticals like energy.

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