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IRB Infra yet to receive bank guarantee from NHAI

The highest bid NHAI recieved was made 14% lower than the reserved price by Cube Highways

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IRB Infrastructure Developers Ltd still hasn't received their bank guarantee (BG) back from the National Highways Authority of India (NHAI) that the company had placed to participate for toll-operate-transfer's (TOT) second package.

December 19, 2018 was the last date to submit TOT quote. The national highway maker received responses below the base price leading to the authorities contemplating if they wanted to accept the highest bid of Rs 5,362 crore or not. The highest bid, made by Cube Highways is 14% lower than the reserved price.

"They (NHAI) have not returned our BG yet," said Milind Mhaiskar, chairman and managing director, IRB Infrastructure Developers in an earnings analyst call on Monday.

He added, "The NHAI has got one of the best numbers, they should go ahead and award it. If they are not going to award it, they would be making a mistake. But, I do not know what they have finally decided to do."

For the initial TOT package, IRB Infrastructure Developers had tied up with Italian major Atlantia.

Singapore-based Cube Highways, IRB Infrastructure Developers and Adani Group-Prakash Asphaltings & Toll Highways India Ltd had submitted their bids of Rs 4,612 crore, Rs 3,675 crore and Rs 2,718 crore respectively for the second package. The bids were invited in August 2018.

The maiden TOT package bagged by the joint venture of Macquarie and Ashoka Buildcon had received a 'bumper response' and the quote was 54% higher than the base price.

When DNA Money contacted NHAI officials, they did not comment if the package would go for a re-bid or Cube Highways' offer would be accepted followed by the authorities coming up with a subsequent package by the end of this fiscal.

On Monday, IRB Infrastructure Developers announced their Q3 FY2019 results, where they reported a 6% YoY rise in their net profit at Rs 219 crore as against Rs 207 crore a year ago. The Mumbai-based company's total income during the quarter ending December 2018 increased by 37% to Rs 1,835 crore as compared to the year-ago period.

Commenting on the results, Mhaiskar said, "We are happy to report growth for yet another quarter aided by a slight rise in traffic and continued execution of projects on hand. We achieved financial closure for our Gujarat project during the quarter and will start construction shortly. The current quarter is expected to be even stronger with continued traffic momentum as we near completion for some of our projects."

In August 2019, the concession period for Mumbai-Pune Expressway is coming to an end. This Build-Operate-Transfer (BOT) project is the highest revenue earner for the Mhaiskar-promoted company.

During Q3 FY19, of Rs 553 crore BOT toll collections of the company, Mumbai-Pune Expressway contributed Rs 237.2 crore.

At the moment, the company is betting big on three of their BOT projects, namely, Udaipur Gujarat Border, Gulabpura Chittorgarh and Kishangarh Gulabpura.

FIGURATIVELY SPEAKING

  • Rs 5,363 cr – was the highest bid NHAI received which was made by Cube developers
     
  • Rs 553 cr – total BOT toll collections of IRB Infrastructure Developers in Q3FY19
     
  • Rs 237 cr – contributed by Mumbai-Pune expressway alone
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