IRB Infra shares surge 8%; check Motilal Oswal's view, rating and target price

Shares of IRB Infrastructure Developers Ltd (IRB Infra) surged about 7 per cent during the trading session on Friday after the company Ferrovial acquired a stake in IRB Infrastructure Trust. The company informed about the same in detail through an exchange filing with the bourses. Cintra, a unit of Spanish infrastructure developer Ferrovial, has agreed to buy a 24 per cent stake in IRB Infrastructure Trust from GIC, along with a similar stake in MMK Toll Road, the investment manager of the trust, said the exchange filing by IRB Infra. The stake purchase is worth Rs 6,590 crore (about $796 million), it added. Following the announcement, shares of IRB Infra surged more than 7.5 per cent tos R 60.29 on Friday, commanding a total market capitalization of more than Rs 35,000 crore. The scrip had settled at Rs 56.07 in the previous trading session on Thursday.

The acquisition is subjected to fulfilment of conditions and requisite regulatory and third-party approvals, the IRB's filing said. IRB Infrastructure Trust is an infrastructure investment trust (InvIT) which operates road assets. GIC first invested in the IRB Infrastructure Trust in August 2019 when it invested Rs 4,400 crore for a portfolio of nine toll roads. IRB expects the collaboration between IRB, GIC, and Cintra to enhance project planning and selection processes. There would not be any fund infusion into the Private InVIT due to this transaction, said Motilal Oswal Financial Services. IRB is uniquely positioned to expand its asset base, and drive sustainable growth, it said. "The company will benefit from the growing EPC and O&M order book, which stood at Rs 36,200 crore as of December 2023. With a robust tender pipeline of projects to be awarded by NHAI and a healthy order book, we expect IRB to register a 12 per cent revenue CAGR over FY24-26E with sustained margins, Motilal added with a 'neutral rating and a target price of Rs 60.