IRB Infrastructure, a leading road developing company is on course to bid for Hybrid Annuity Model (HAM) road projects. Having tasted success by becoming a major BOT (Build Operate Transfer) developer, the company is now intending to expand its operations.
When asked about the impact of GST, Virendra Mhaiskar IRB Infrastructure owner reckoned that the most things are sorted as of now. Earlier, thegovernment took a couple of months to reduce the GST rate from 18 per cent to 12 per cent, before taking another month to clarify that annuity payments would not attract any payments. However, the traffic volumes have not picked up yet, which he feels will pick up over a long term.
Demonetization has reduced the waiting time at toll plaza. Many people are opting for RFID cards, point of sales,Paytm, etc. Talking about the present situation, Mr Virendra stated that IRB’s toll collection is around 25-30 per cent on electronic platforms compared to less than half a percent prior to demonetization. He also explained that the company has one dedicated lane for RFID tags. But the company is intending to upgrade the toll plaza’s to accept RFID cards in other lanes after seeing the promising growth of electronic platforms.
When asked about the opportunities of IRB Infrastructure to build the order book with the bharatmala program, Virendra Mhaiskar exuberated confidence about the future of the company, especially with toll-operate-transfer model and Hybrid projects. He informed that the NHAI has 20 Hybrid projects, which it is planning to bid out in the coming months. Mr Mhaiskar said that the company has decided to bid for HAM projects, because of lack of BOT projects. He also briefed that the company will be looking at the aspects of Bharatmala program as it rolls out.
On fund raising plans, the owner of IRB said that the company is sitting on a decent amount of cash after unlocking value through InvIT. He felt that the company will need to deploy this cash studiously, so that it is value accretive from a shareholders perspective. He further added that the company will go through a cash flow generation, so there is no plan of fund raising.
With InvIT, IRB Infrastructure is in a self-sustaining zone where it will bid for projects, execute them, stabilise and transfer them to the InvIT, realise its capital with whatever upside is possible, and redeploy that. Mr Mhaiskar said that the company is not dependent on fund raising for future growth, as it is well funded for all the immediate opportunities.