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IRB Infra Block Deal: Cintra Offloads 6.8% Stake

IRB Infrastructure Developers witnessed a significant block deal on June 11, resulting in a considerable dip in its stock price. Around 41.20 crore shares, representing 6.8% of the company, were traded in two block deals, marking a total transaction value of Rs 2,656 crore. The shares were sold at an average price of Rs 64.40 each. The CCI had, in the beginning of June, approved Cintra’s proposed acquisition of 24 per cent unitholding in IRB Infrastructure Trust and MMK Toll Road Pvt Ltd.

Key Highlights:

  • Stake Sale by Cintra: Cintra planned to sell approximately 5% of its stake in IRB Infra. The transaction was expected to raise around $228 million.
  • Lock-In Period: Following the block deal, there will be a 150-day lock-in period, preventing Cintra from executing further block deals to offload more of its stake in IRB Infra during this time.
  • Stock Reaction: The massive stake sale led to a significant drop in IRB Infra’s share price, which plunged over 10% during Tuesday’s trading session. The shares hit an intraday low of Rs 63 on the NSE, before slightly recovering to trade 7% lower at Rs 65.25 by 9:54 am.
  • Price Comparison: The average transaction price of Rs 64.40 was approximately 8% lower than the stock’s previous closing price of Rs 70.16 on Monday.
  • Revenue Growth: The company’s revenue from operations surged over 27% to Rs 2,061 crore in Q4 FY24, up from Rs 1,620 crore in Q4 FY23.
  • EBITDA: Earnings before interest, tax, depreciation, and amortization rose by over 17% to Rs 890 crore, compared to Rs 759 crore in the previous year.

Future Outlook:

  • Order Expectations: IRB Infra anticipates substantial orders worth Rs 2 lakh crore in the BOT toll sector over the next 12–18 months and aims to secure Rs 25,000–30,000 crore, capturing around 15% of the market share.
  • Impact of RBI Guidelines: The company does not foresee any significant financial impact from the recent RBI guidelines, as banks are already charging higher interest rates for under-construction projects compared to operational ones.

The strategic stake sale by Cintra, coupled with strong quarterly results and optimistic future projections, underscores IRB Infra’s dynamic position in India’s infrastructure sector. However, the market’s immediate reaction highlights the sensitivity to significant share movements and regulatory impacts.