MUMBAI: IRB Infrastructure Developers Ltd has tied up ₹6,600 crore (about $867 million) of debt financing for acquiring tolling rights of the Mumbai-Pune Expressway, which it won through a bidding process in February, said two people aware of the development.
IRB's 15-year tolling contract for the Mumbai-Pune Expressway expired in August last year. After multiple rounds of bids, IRB emerged as the winner for the 10-year contract for a consideration of ₹8,262 crore.
The funds have been raised from a consortium led by the State Bank of India, said one of the people cited above, requesting anonymity.
IRB will make a payment of ₹6,500 crore to the Maharashtra State Road Development Corp (MSRDC) today, the person said.
"The first tranche of payment of ₹6,500 crore will be made to MSRDC today. The balance has to be paid over multiple tranches over the next two-three years. They have raised the funds at interest rates of around 8-8.5%," he said, adding that Bajaj Consultants advised IRB on the fundraise.
Mumbai-Pune Expressway was the first six-lane access controlled high speed toll road in the country.
A spokesperson for IRB declined to comment.
"This is a tough market for toll roads as traffic has fallen due to the covid-19 pandemic. Despite this the company has managed to tie up the funds, without requiring any extension for the financial closure," said the second person cited above, also requesting anonymity.
Despite current circumstances, the Mumbai-Pune Expressway is expected to perform well given that it is the primary route that connects the two large metros, he added.
Last year, Singapore’s sovereign wealth fund GIC had invested ₹4,400 crore in a road platform set up by IRB.