IRB Infrastructure shares surge 18% in two days; more steam left?

Intraday, it touched a high of ₹60.20.

The gains were backed by Cintra, a subsidiary of the Spanish infrastructure giant Ferrovial, acquiring stake in IRB Infrastructure Trust (IRBIT). IRBIT is a publicly listed SEBI-registered Infrastructure Investment Trust.

IRB Infra owns 51% of the units in the Trust, with the remaining 49% held by Singaporean investment fund GIC and its affiliates. GIC affiliates will sell nearly half of their 49% stake in IRBIT to Cintra, IRB Infra informed the exchanges on Thursday.

The stake purchase is worth ₹6,590 crore (about $796 million), the company said.

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, Motilal Oswal Financial Services said in its note on IRB Infra.

Further, Motilal said that IRB, with a diverse variety of investors, is uniquely positioned to expand its asset base, and drive sustainable growth. The company will benefit from the growing engineering, procurement, and construction (EPC) and O&M order book, which stood at ₹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% revenue CAGR over FY24-26E with sustained margins,” the brokerage said while retaining its ‘Neutral’ rating on the stock with a target price of ₹60 per share.