The proposed investment will be used to fund the acquisition of the Hyderabad Outer Ring Road (ORR) project, which the IRB group successfully bid for under the toll-operate-transfer (TOT) monetisation plan for a sum of ₹7,380 crore for a concession period of 30 km in April. This is the second biggest TOT asset to be acquired by IRB following the acquisition of Mumbai-Pune Expressway project in February 2020 for a sum of ₹8,262 crore. IRB has an asset base of over ₹70,000 crore across the parent company and two InvITs.
“GIC is evaluating the ORR project that IRB has successfully won under the TOT auction process. If GIC decides to join IRB in the acquisition of the road project then the project will be acquired through the InvIT, where GIC holds a 49% stake. Discussions between the two parties are ongoing,” said one of the persons.
The Hyderabad ORR is a 158 km, eight-lane ring road expressway encircling Hyderabad, the capital city of Telangana. Opened in December 2012, a large part of around 124 km of ORR covers urban nodes like Hi-Tech City, Nanakramguda Financial District, International Airport, IKP Knowledge Park, Hardware Park, Telangana State Police Academy, Singapore Financial District and Game Village.
The purchase of the ORR project for ₹7,380 crore includes an equity value of ₹3,000 crore, which if done through the InvIT will see GIC and IRB invest roughly around ₹1,500 crore each into the InvIT, said the second source. “The road generates toll revenue of around ₹640 crore annually,” he added. IRB Infrastructure Developers declined to comment on ET’s query, while an email sent to GIC remained unanswered till press time. GIC first invested in the IRB Infrastructure Trust in August 2019, when it wrote a cheque of ₹4,400 crore for a portfolio of nine toll roads.