Irb Infrastructure Owner Virendra Mhaiskar Appoints Former Nhai Chief As Chairman

By Author: John Wilson
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IRB Infrastructure Developers’ wholly-owned subsidiary, IRB Infrastructure announced appointing the former chief of NHAI, Rajinder Pal Singh as its new Chairman to the Board.
Singh, who is a former chief of NHAI (2012 to 2015), is also an IAS and has past experience of working in the areas of Finance, Urban and Infrastructure Development, and Industry. Singh has also been the Chairman & Managing Director of Punjab & Sind Bank previously and a Secretary at the Department of Industrial Policy and Promotions.
Virendra Mhaiskar, IRB Infrastructure Developers CMD said: “We are confident that his rich domain knowledge and expertise will be of great help to the IRB Group in achieving new heights of success.” IRB Infrastructure Developers Ltd is counted among the most prominent private highways and roads infrastructure developers of India.
Currently, Singh is on the Board of Directors of Bharati Infratel Ltd, Maruti Suzuki India Ltd and Lodha Developers.

IRB Infrastructure Developers has bagged a Rs 10,050-crore order to construct the Zozila pass tunnel in Jammu & Kashmir.

The company ...
... has received a Letter of Award from Ministry of Road Transport and Highways for the construction, operation and maintenance of the longest tunnel in South-East Asia, Zozila pass Tunnel in Jammu & Kashmir, a statement issued here said.

Reacting to the news, shares of the company were trading at RS 260, up 6.19 per cent around 1030 hrs on BSE.

"It is the biggest national highway project awarded in India in terms of project cost with a tunnel length spanning 14.08 km and costing of Rs 10,050 crore," company's Chairman and Managing Director Virendra Mhaiskar said.

The scope of the project includes constructing approaches on NH-1 (Srinagar Sonmarg Gumri Road) on design, build, finance, operate and transfer (annuity) basis.

"This project has a strategic and socio-economic importance as it will provide much needed all weather connectivity between J&K and Leh Ladakh, which remains cut off during winter due to heavy snowfall and hence assumes national importance," he said.

The project also involves construction of tunnel spanning length of 14.08 km and approach road of 10.8 Km with three vertical ventilation shafts, snow gallery of 700 meters and avalanche protection measures.

The construction of the tunnel is scheduled to be completed in seven years and the concession period is 22 years.

He further said IRB Infra will receive semi-annual annuity of Rs 981 crore from the government, which will start after completion of construction of the project, twice in a year till the end of the concession period.

With this order, IRB expands its base to the ninth state.

The company's order book now stands at Rs 16,430 crore.

It's a special occasion for all of us at IRB, and it has been made possible by each one of you. I congratulate our stakeholders on the completion of five years since our Initial Public Offering. We commenced our journey with a vision to emerge as one of the largest infrastructure companies in the roads and highways sector of India. Our hard work, perseverance and the generous support and guidance of all stakeholders have stood us in good stead. Today, we enjoy pan–India presence and our achievement is the result of integration across the BOT value chain, an all–pervasive focus on every relevant area of the business and finally, expansion to embrace new opportunities.

Numbers can paint a better picture than words. Since FY 2007–08, our net worth has doubled in five years. Our total income has grown nearly five times; profit after tax nearly four and a half times; gross assets nearly four times. Our portfolio has increased from 11 BOT Projects and 2,112 Lane kms in FY 2007–08 to 18 BOT Projects and 7479 Lane kms in FY 2012–13, respectively.

Infrastructure is the backbone of any economy. Therefore, rapid investment in infrastructure creation and maintenance is vital for the economy to grow at 8%. The past year was tepid for roads and highways infrastructure, as few projects were awarded by NHAI, due to weak bidding, coupled with stringent lending norms adopted by banks and financial institutions. Now, we are seeing early signs of positivity in the operating environment. India's Wholesale Price Index (WPI) inflation is cooling off, interest rates are declining gradually and the government is implementing fiscal consolidation to bring dynamism in the economy. Delayed projects are also expected to receive prompt clearances with environment and forest clearances now being delinked.

An integrated approach to BOT projects has enabled us to strengthen revenues, invest in our asset base and create greater value for our shareholders. With our skill sets and experience, staying focused on BOT projects has benefited us with skill and experience, as compared to our peers, and helped us to minimise cost and time overruns. As a result, though infrastructure development is capital intensive our net Debt to Equity ratio is close to 2.24:1. Expanding our pan–India presence has also been vital to de–risking our portfolio as well as being less dependent on a few regions for our income. We have also been open to viable acquisitions, like MVR Infrastructure, value–accretive proposition which also helped us to widen our presence in South India.

In the current year, we have completed substantial work on four projects under implementation during FY 2012–13. Besides, we also started construction work on Ahmedabad–Vadodara project from January 1, 2013. This has led to 21% increase in construction revenue for FY 2012–13, as compared to FY 2011–12. The operating EBITDA for the Construction segment remains strong at around 26% during the year. Our toll revenue has increased by around 10%, as compared to FY 2011­12, on the basis of moderate traffic growth and higher WPI vis–a–vis last year. The Company earned a profit of Rs. 554 Crores on a total income of Rs. 3,817 Crores, an increase of 12% and 17% respectively in comparison to FY 2011–12. I am pleased to state that we have paid 40% dividend in FY 2012–13 vis–a–vis 18% in FY 2011–12.

Our order book now stands at approximately Rs. 8,400 Crores, of which projects worth Rs. 6,400 Crores will be executed in the next three years. This gives us good visibility for 2 to 3 years. We expect toll collections to grow significantly during FY 2013–14, on the back of Ahmedabad–Vadodara expressway, Talegaon–Amravati, Jaipur–Deoli and Amritsar–Pathankot projects.

At IRB, we believe businesses have an important role to play in social uplift. We touch the society by providing world class roads and highways, but there is another way, in which we can modestly make a difference: education. Education can encourage large sections of the population to create and embrace opportunities for a better quality of life. We have education–based initiatives, like IRB Primary Schools, targeting Rajasthan's backward regions and are replicating the model to other deficient regions close to our project locations.