IL&FS Transportation plans to raise ₹3,500 crore

IL&FS Transportation Networks Ltd, (ITNL), a road development arm of infrastructure development and finance major IL&FS, has proposed to raise ₹3,500 crore by issuing non-convertible debentures on a private placement basis in one or more tranches.

A resolution for the same is to be approved at company’s AGM scheduled on August, 29, the company has informed the exchanges.

ITNL has also announced its results for the first quarter of the current fiscal.

The company registered ₹954 crore revenue from operations on a standalone basis compared to ₹1,163 crore in the corresponding quarter of the last financial year mainly due to decrease in construction activities. ITNL posted a net profit of ₹24.7 crore (₹18 crore) in the first quarter.

In a call with analysts, Mukund Sapre, Executive Director, said ITNL’s order book in BOT (Build–operate–transfer ) business stands at ₹11,665 crore while its EPC order book stood at ₹539 crore. However, with no new BOT projects expected to come in the market in the near future, the company is likely to shift its focus towards EPC contracts.

According to Sapre, ITNL had bid for several metro contracts as well as two or three road projects, including Mumbai Trans Harbour Link (MTHL). It is expecting the bid for this project to be opened within next two or three months.

Sapre noted that ITNL is qualified for bids amounting to ₹19,600 crore out of which it targets around ₹4,000-5,000 crore additional EPC works.

The contract for constructing Zojila tunnel project in Jammu and Kashmir worth ₹4,899 crore that ITNL had recently won may help in achieving this fiscal’s the target for EPC business.

“This is a huge number for us, and we have already done projects in this geography, this will be the third project,” Sapre said.

ITNL emerged as the lowest bidder in Zojila tender: it bid lower than the reserve price of ₹5,600 crore and significantly lower than the other three bidders, including L&T, Reliance Infra and Jaiprakash Associates who bid above ₹7,000 crore, according to sources.

According to Sapre, ITNL had earlier procured equipment for other projects in J&K which it now would deploy in the new project.

ITNL has completed Chenani-Nashri Tunnel Project which is a part of 286-km long four-laning of the Jammu-Srinagar National Highway and is currently working on Sonmarg-Srinagar tunnel project.

ITNL has been trying to reduce its debt as well as the interest cost for the past several quarters. Its consolidated debt is estimated at around ₹27,000 crore.

Last year it divested several road assets and is in the process of divesting assets in China. It also refinanced debt of two SPVs – Jharkhand Road Projects Implementation Company Ltd (JRPICL) and Hazaribagh Ranchi Expressway Ltd (HREL) which provided the company with additional ₹2,600 crore and allowed interest saving of around 250-280 basis points.

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