Goldman, Deutsche, Merrill Lynch scoop up 12% in IRB Infra

MUMBAI: Goldman Sachs, Deutsche Bank and Merrill Lynch have picked up around 10-12% in IRB Infrastructure Developers for around Rs 260 crore ($60 million). Sources said the Mumbai-based holding company, having 10 subsidiaries, is valued at around Rs 2,500 crore by the discounted cashflow (DCF) method.

When contacted by ET, Virendra Mhaiskar, chairman and managing director of IRB Infrastructure Developers, confirmed the deal and said the investment has already received the mandatory approval from the Foreign Investment Promotion Board (FIPB).

IRB or Ideal Road Builders is a popular name in Maharashtra, where it is operating over half-a-dozen BOT (build, operate and transfer) projects. In May 2000, Mhaiskar Infrastructure (MIPL), 60% owned by the holding company, had taken over the Mumbai-Pune Expressway in open bidding, when Maharashtra State Road Development Corporation (MSRDC) privatised the swanky road. IRB paid Rs 1,400 crore to MSRDC, with an upfront payment of Rs 918 crore. IRB is also maintaining the old Pune road on the National Highway 4.

Other BOT projects of IRB include Rs 1,400 crore Baruch-Surat 6-lane project, part of the Golden Quadrilateral phase-V by National Highway Authority of India (NHAI), which is currently under construction. This project is being undertaken by a joint venture company IDAA Infrastructure. IRB is also widening and concretising the Thane-Ghodbunder Toll Road.

Two other BOT projects are Pune-Solapur and Pune-Nashik, both 100% owned by IRB Infrastructure Developers.
Ideal Road Builders (IRB), which is 63% owned by the holding company, and the wholly-owned Modern Road Makers are two operating companies that take care of construction, operation and management of the BOT projects.

“All the future projects will be handled by the holding company,” said Mr Mhaiskar. They have now applied for pre-qualification for eight packages under phase-V of Golden Quadrilateral — all 6-laning projects undertaken by NHAI. Mr Mhaiskar said the company would hit the primary market with an IPO after 12-18 months.

The Mhaiskar family has been in road construction and management for over a decade. One of the first BOT road projects in the country — Thane-Bhiwandi bypass project — was completed by IRB way back in 1995.