IVRCL Ltd will start a second tranche of divestment, covering its Chennai desalination plant and two road projects. The company expects the process to take a couple of quarters.

E. Sudhir Reddy, Chairman and Managing Director of IVRCL, told Business Line the company would rather have managed these projects after completing them, as they are some of the best in the country.

“However, the economic environment and circumstances we are in and the general perception of this battered sector are such that we are forced to divest stake in some of the projects,” he said. “We will now take up divestment of the Chennai project and a highway project between Jalandhar and Amritsar.”

Earlier, IVRCL had indicated its plans to divest a stake in two other highways — Raipur-Bilaspur and Indore–Jhabua. The company has an order book of over Rs 25,000 crore.

Reddy explained: “The Chennai desalination plant is one of the best projects the company had executed. We believe we should move on to concentrate on other projects. There are a couple of investors from Japan and the US who have evinced interest in the project. However, they want the market conditions to get better before they conclude deals.”

The company has an overall debt of about Rs 5,000 crore. “On a standalone basis, it has Rs 2,500 crore and the rest is with its special purpose vehicles. By the divestment, we will bring down the debt component and this will help us infuse equity into new projects,” Reddy said.

Earlier this year, the Hyderabad-based construction and infrastructure firm had closed a deal with TRIL, a Tata entity, to sell a strategic stake in three of its completed highway projects in Tamil Nadu for Rs 2,200 crore.

> rishikumar.vundi@thehindu.co.in

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