Virendra Mhaiskar counts on strong order book to tide IRB over poll slowdown

IRB Infrastructure, one of the India’s leading road and highway developing companies, is all set to sail through a potentially slack period in the wake of general elections in 2019. Anticipating a slowdown in the projects to be released by the government during this phase, its CMD, Virendra D Mhaiskar assured stakeholders in the 20^thAGM that IRB Infra is well-placed to tide over this phase.

Virendra D Mhaiskar also added that the company is on course to maintain the stability in the next 2-3 years with an order book of around Rs 15,000 crore.

Winning about Rs 9,000 crore worth of orders in March, IRB Infrastructure made a remarkable start in the current financial year. This included three projects under the hybrid annuity model (HAM), accounting for Rs 5,500 crore.

Talking about these projects, Virendra D Mhaiskar said, “The Company is on the track to achieve financial closure for all the three HAM projects as well as the sole toll-based project, in the next couple of months.”

With the attainment of these projects, IRB Infrastructure has increased its project portfolio to 17, with 14 of these being toll-based. The company also transferred seven of its operating road assets to the infrastructure investment trust (InvIT) in FY18.

Currently, 11 out of the 14 toll-based projects of IRB are generating revenue, while the remaining three projects are likely to start generating revenues before the end of 2018.

In addition to this, Virendra D Mhaiskar stated that he envisions a robust growth for the company, given the government’s aggressive road building stance. With initiatives like Bharatmala Pariyojana, which aims at investing more than Rs 5 lakh crore in the next 5 years, the CMD of IRB Infrastructure affirmed that he sees robust growth in the future.

Considering the sentiment-based share markets in India, the upcoming general elections could potentially have a volatile impact. The time from January to June 2019, is crucial for many top conglomerates in India as the General Elections are likely to trigger sentiments.

Past records show that since 1989, Indian market before general elections has gained on five instances out of eight an year. However, in September 2008, Sensex slumped 27%, with the Global Financial crisis playing a key role.

In a report which states that 2018 will be a tough year, Money control listed down 20 companies which are expected to give high returns in 2018. It included the names of two road builders: IRB Infrastructure and KNR Constructions.

Talking about IRB Infrastructure, an official statement in the report read: “We believe IRB’s foray into HAM with more assured cash flows and the upcoming TOT opportunity should provide the next leg of growth and drive re-rating.”