In two block deals on June 11, over 41.20 crore shares of IRB Infrastructure Developers, or 6.8% of the firm, were exchanged. The deal, which was completed at an average price of Rs 64.40 per unit, had a total value of Rs 2,656 crore.
The parties to the transaction were not readily identifiable to Moneycontrol. On June 10, however, we revealed that Cintra, a subsidiary of the Dutch infrastructure giant Ferrovial, was planning to generate around $228 million by selling about 5% of IRB Infra in a block sale.
According to our report, which cites sources, the transaction will also start a 150-day lock-in period before Cintra can execute any more block deals to sell off additional shares in the infrastructure company.
The company’s most recent shareholding data, updated at the end of the March quarter of FY24, showed that Cintra possessed a 24.86 percent ownership in IRB Infra. As per our information, the i-banks involved in the transaction were Jefferies and HSBC. IRB Infra’s stock fell around 10% after the block deal, and as of 09.36 am, it was trading at Rs 64.74 on the NSE.
Notwithstanding the decline today, IRB Infra’s stock has been rising recently thanks to higher toll prices and hopes that Modi 3.0 will keep pushing for infrastructure development. The stock has experienced an incredible 2024 run, yielding returns of about 70% so far this year.
The corporation also said last week that toll collections increased by 30% year over year to Rs 536 crore in May. Even more promising is the management’s prediction that the upward trend in toll collections will continue in the upcoming months due to the higher toll rates that went into effect from early June.
On June 11, 2024, IRB Infrastructure Developers Ltd experienced a significant block deal, resulting in a notable decline in its stock price. Approximately 41.20 crore shares, representing a 6.8% stake in the company, were traded at an average price of ₹64.40 per share, amounting to a total transaction value of ₹2,656 crore.
The primary seller in this transaction was Cintra, a subsidiary of Spanish infrastructure conglomerate Ferrovial. Prior to the sale, Cintra held a 24.86% stake in IRB Infrastructure. This divestment is part of Cintra’s strategic move to reduce its holdings in the company.
The announcement of the block deal had an immediate impact on IRB Infra’s stock performance. The share price dropped over 10% following the transaction, reflecting investor concerns over the substantial offloading of shares by a major stakeholder.
This event marks the second significant block deal involving IRB Infrastructure within a short span. On May 30, 2024, the company’s promoters sold a 4% stake through a block deal, where 31.3 crore shares, constituting 5.20% of the total equity, were transacted at an average price of ₹65 per share, totaling over ₹2,033 crore.
Despite these large-scale share sales, IRB Infrastructure has demonstrated robust financial performance. In the fourth quarter of the previous fiscal year, the company reported a 45.1% year-on-year increase in net profit, reaching ₹188.9 crore, up from ₹130.2 crore in the corresponding period of the prior year. Revenue from operations also saw a 27.2% rise, amounting to ₹2,061.2 crore compared to ₹1,620 crore previously.
The recent divestments by major stakeholders, coupled with the company’s strong financial metrics, present a complex scenario for investors. While the offloading of shares by significant shareholders may raise questions about future ownership structures,
the company’s solid performance indicators suggest underlying business resilience. Stakeholders and potential investors are advised to monitor subsequent developments closely, as they may influence IRB Infrastructure’s market position and stock valuation in the near term.
Group Media Publication
Construction, Infrastructure and Mining
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