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Tue January 18 2022

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Ferrovial buys stake in Indian road developer

4 Jan Ferrovial subsidiary Cintra has completed the acquisition of a €369m (£310m) stake in a leading toll road developer and operator in India.

Cintra has bought 24.86% of Indian company IRB Infrastructure Developers as it said that it sees great opportunities for growth in India, given the volume of concession projects. IRB Infrastructure Developers manages 24 projects and more than 2,500km of toll roads.

The deal has been completed after a preferential share issue by IRB Infrastructure Developers. As a result, Ferrovial is now a significant minority shareholder with representation on the company’s board of directors.

Cintra is expected to support the company’s development and share its international experience in managing toll roads and analysing new investment opportunities.

The deal was completed following approval by IRB’s Shareholders’ Meeting and after obtaining the pertinent statutory approvals. IRB will continue to be managed by its majority shareholder, Virendra D Mhaiskar.

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IRB Infrastructure Developers was founded in 1998 and is listed on the Bombay Stock Exchange. It developed the country’s first build-operate-transfer (BOT) concession and currently has 24 toll road projects in its portfolio, representing about 20% of the Golden Quadrilateral, a road network linking the country’s main economic development centres. Its assets include the Mumbai-Pune Expressway, one of India’s main highways.

Last year it reported €630m in revenue, and €310m in earnings before interest, taxes, depreciation and amortisation (EBITDA).

Its business model integrates concessions and construction. The construction division, which currently works exclusively on the company’s own concession projects, has built around  14,000 lane-kilometres of road. The company has recently achieved commercial closure of a 20km stretch of a road between Chittoor and Thachur, located in Tamil Nadu. IRB has also been awarded the design, financing, construction and operation of a 129.7km section of the Greenfield Ganga Expressway between Meerut to Budaun in Uttar Pradesh.

Infrastructure development plans have been multiplying in recent years, and use of public-private partnerships is expanding. Ferrovial said that more over €240bn are expected to be invested in toll roads in 2022-2025.

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