IRB shares down despite chances of winning toll rights

The shares of IRB Infrastructure Developers Limited, an Indian highway construction company, fell over by two per cent on Wednesday despite that the company is all set to win a contract for the operation and collection of toll at Mumbai-Pune Expressway for 10 years.

According to reports, IRB Infrastructure was already maintaining the abovementioned toll since the last 15 years but their contract had ended in August, 2019, after which, Sahakar Global Limited was appointed as a temporary contractor but now, Maharashtra State Road Development Corporation (MSRDC) invited fresh bids on February 11, 2020 (Tuesday) for the appointment of a new collection agency. However, there are chances that IRB would win this contract again for the next decade as it is the only agency to participate in the bidding.

Nevertheless, Adani Group and Cube Highways & Infrastructure had also shown interest in this tender but did not go ahead with the bidding process. It is being presumed that the size of this project and uncertainty over toll collection may be some of the reasons for their non-submission.

Meanwhile, the reserve price for the project is set at Rs 8,534 crore while, the winner would have to make an upfront payment of Rs 6,500 crore and the rest could be paid in installments.

At 12.09 pm on Wednesday, the stock of IRB Infrastructure is trading at Rs 107.85, down by 2.49 per cent against its previous close of Rs 110.60 on BSE.