60 slides from Irb Infrastructure Developers's investor presentation, August 2022
Slide 1: Investor Presentation August 2022
Investor Presentation August 2022 India’s First Multi-National Infrastructure Company in the Highways Sector Press Release – Preferential Allotment October 2021
Slide 2: Table of Contents
Table of Contents IRB Overview Page 2 Business Overview IRB Parent Overview Page 22 Private InvIT Overview Page 25 Public InvIT Overview Page 28 Industry Overview Page 34 Appendix Page 43
Slide 3: IRB Overview
IRB Overview Private & Confidential
Slide 4: Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure
Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure Pan India presence c. 18 years c. 20% INR 600 bn+ Weighted Of Golden 10 Highway asset 11,930 lane average Quadrilateral States in India base, one of the KM residual owned and where assets largest in India
Slide 5: Owns and Manages c. 12,000 Lane KM of Roads across 10 States in India
Owns and Manages c. 12,000 Lane KM of Roads across 10 States in India India’s leading portfolio of road assets (lane KMs)1 11,930 2,945 8,400 6,890 5,379 4,919 4,400 3,755 2,596 2,072 3,400 1,852 8,985 8,400 4,031 226 604 4,642 851 668 4,818 4,174 3,152 3,400 1,493 737 888 1,744 1,184 283 Operationa
Slide 6: Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities
Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities Highly evolved design capabilities In-house capabilities, with a pool of through 40+ years of experience expert workforce, to carry out EPC Use of high-grade polymer modified (Construction) and
Slide 7: Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG
Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG Technology driven maintenance regime Site level data capture Predictive analytics Timely preventive & corrective maintenance Benchmarking with global standards Real time operations, monitoring & control ESG comp
Slide 8: Supported by Marquee Financial and Strategic Investors
Supported by Marquee Financial and Strategic Investors IRB recently concluded the largest equity fund raise by a listed Indian infrastructure developer in the roads and highways sector Ownership structure post transaction Access to technical expertise, global experience and long term capital 1 ‒ Cin
Slide 9: Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite
Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite Distribution1 Distribution1 Holdco 16% Margin + / - WC 100% 100% BOT / TOT / HAM CONSTRUCTION Private InvIT (IRB 51%, 7 Assets including all Public InvIT (including operations & GIC 49% cash generating
Slide 10: Approach adopted by analysts for valuation of Integrated Developer Model
Approach adopted by analysts for valuation of Integrated Developer Model Particulars Methodology Value of concession Business DCF of FCFE over concession life Value of Construction Business PE Multiple or EV/EBIDTA Value of Non core assets (Land bank and airport) Multiple on Investment Total Value o
Slide 11: Value evolution for a typical BOT Concession over its life cycle
Value evolution for a typical BOT Concession over its life cycle 10
Slide 12: Financial Highlights
Financial Highlights Total Income (INR mn) EBITDA (INR mn) 58,628 69,026 70,472 54,875 63,554 42% 45% 45% 49% 53% 21,929 18,366 18,768 18,894 16,652 31,329 31,664 33,492 47,098 52,105 27,016 39,734 38,223 44,786 24,480 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Construction revenue BOT revenu
Slide 13: Significant Improvement in Leverage Position Post Equity Infusion by GIC and Cintra
Significant Improvement in Leverage Position Post Equity Infusion by GIC and Cintra Net Debt position before and after the deal Pre deal net debt Post deal net debt Out of INR 53,470 mn equity infused as a part of the deal, INR 32,500 mn was used for deleveraging, resulting in significant improvemen
Slide 14: Ratings for Long Term Credit Facilities (as at FY22 End)
Ratings for Long Term Credit Facilities (as at FY22 End) IRB Infrastructure Developers 2 Modern Road Makers Private Limited 1 Limited Outstanding Debt – Rs. 32,502 Mn Outstanding Debt – Rs. 3,178 Mn Rating – Ind A+ / Positive Rating – CARE A+ / Stable IRB Ahmedabad Vadodara Super 3 Express T
Slide 15: Share Price Performance
Share Price Performance DEC 2021: Cintra & GIC close IRB transaction. IRB share price (rebased to 100) 500.0 DEC 2021: IRB is awarded Ganga Expressway FEB 2021: Raised INR APR 2021: Awarded 1 21.9 bn through NCD new HAM project and issuance to FPIs backed 1 new BOT project AUG 2020: Awarded a by a U
Slide 16: Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects
Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects, Spread Across India, for Optimal Risk – Return Mix 1 Bid for new assets 2 Diversify presence NHAI expected to award HAM projects to the tune of INR 4,000 bn, BOT projects worth INR Strategically expand its presence ou
Slide 17: Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain
Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain, Successfully Raising Funds at Crucial Junctures 1977 1995 2004 2008 2016 2017 2018 2020 2021 Length: 1,234 Length: 1,168 LKM LKM Cost: INR 11 Cost: INR 90 bn bn Raised INR 50 Raised INR Length: 1,972 bn 9.45 bn throu
Slide 18: Strong Focus on Protecting the Environment and Giving Back to the Community
Strong Focus on Protecting the Environment and Giving Back to the Community Ferrovial is a sustainability champion, ranking highly in various indices… IRB has a strong focus on environment, sustainability and community, which is expected to be further strengthened through Ferrovial’s expertise Fer
Slide 19: Board Driven Robust Governance Policies
Board Driven Robust Governance Policies Policies Committees Environment policy Corporate Social Responsibility Committee Risk Management Committee Code of Conduct ESG Committee of Management Assurance Human rights Policy Corporate Social Responsibility Policy Corporate Social Respons
Slide 20: Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward
Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward1, to Bring About Reporting Transparency Business responsibility and sustainability reporting (BRSR) is intended towards having quantitative and standardized disclosures on ESG parameters, to enable compa
Slide 21: Business Overview
Overview Business Private & Confidential
Slide 22: IRB Parent Overview
Overview IRB Parent Private & Confidential
Slide 23: Strong In-house Project Design, Execution and Maintenance Capabilities
Strong In-house Project Design, Execution and Maintenance Capabilities Strong construction track Efficient project execution Ability to independently record capabilities Large equipment bank bid for large contracts In-house O&M capabilities Access to best global One of the largest fleet of Exp
Slide 24: Healthy Mix of BOT, TOT and HAM Projects
Healthy Mix of BOT, TOT and HAM Projects Original S. Project cost Lane # of Project Counterparty State Concession Status No. (INR mn) KMs Lanes ( in Years) 2 BOT 1 Ahmedabad Vadodara NHAI Gujarat 48,800 987 6 25 Tolling start: January 1, 2013 projects 2 Ganga Expressway – Pkg 1 UPEIDA Uttar Pradesh
Slide 25: Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio
Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio One of the busiest highway corridors in India which is a part of the Golden Quadrilateral on the Mumbai-Chennai arm Project highlights Project snapshot Project snapshot Tolling operations, maintenance and transfer of Road YCEW - 94 Km , NH-48 –
Slide 26: IRB Private InvIT
InvIT IRB Private Private & Confidential 25
Slide 27: Private InvIT: IRB Infrastructure Trust (Portfolio of 10 Assets)
Private InvIT: IRB Infrastructure Trust (Portfolio of 10 Assets) Asset location Asset overview Sr. Project cost Project Lane KM Status No. (INR mn) Karnataka 758 1 Goa Kundapur 34,770 758 PCOD achieved Maharashtra 1,151 Haryana 2 Solapur Yedeshi 15,900 395 COD achieved Rajasthan Uttar Pradesh 3 Yede
Slide 28: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) 80.0 60.0 53.6 52.5 53.0 40.0 44.0 44.5 40.0 39.5 32.3 32.3 35.3 34.6 20.0 27.3 27.7 30.0 20.0 - Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY2023 Total toll collection (INR mn) 4,819 1626 1591 1601 1,379 1,2
Slide 29: IRB Public InvIT
InvIT IRB Public Private & Confidential 28
Slide 30: Structure of Public InvIT
Structure of Public InvIT Fund structure Unit holders holding more than 1% Investor in units of trust S. No. Unit holder % holding 1 IRB Infrastructure Developers (sponsor) 16.0% Quarterly distribution 2 Government Of Singapore 7.8% 3 Aditya Birla Sun Life Trustee 6.4% Invests in Distributes IDBI Tr
Slide 31: Public InvIT (Portfolio of 5 Assets)
Public InvIT (Portfolio of 5 Assets) Listed in My-2017 with initial portfolio of six operational assets; seventh asset was transferred in Sep-2017 BOT-Toll assets with proven traffic history and spread across different states incl. Maharashtra, Gujarat, Rajasthan, Karnataka, Punjab & Tamil Nadu
Slide 32: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) * 40.0 25.8 25.6 25.7 20.0 22.8 23.9 24.1 21.1 16.8 17.0 17.4 17.9 17.1 15.8 13.7 10.3 - Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY2023 Total toll collection (INR mn) * 775 794 771 2,340 747 658 654 670 52
Slide 33: Financial Highlights
Financial Highlights Gross income1 (INR mn) EBITDA (INR mn) CAGR: 9% 81% 81% 80% 80% 83% 12,701 14,003 12,334 11,609 11,584 10,052 9,989 10,218 9,343 8,191 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 EBITDA margin Net distributable cash flow (INR mn) Net debt (INR mn) 0.2x 0.2x 0.3x 0.3x 0.3x
Slide 34: Unit Price Performance Since Inception
Unit Price Performance Since Inception Price (rebased to 100) Distribution per unit (DPU) 300.0 INR FY18 FY19 FY20 FY21 FY22 DPU 10.6 12.3 10.0 8.5 9.0 Yield1 11.5% 16.4% 17.6% 20.8% 16.1% 200.0 64% 21% 100.0 - May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-2
Slide 35: Industry Overview
Industry Overview Private & Confidential
Slide 36: Indian Road Sector Outlook
Indian Road Sector Outlook Healthy awarding activity seen during last 2-3 years While pace of construction reduced in FY22, improvement Consistent increase in Budgetary estimated to be maintained going forward.. is expected going forward allocation 00’ KM KM Capital Outlay for MoRTH (INR bn) 14,235
Slide 37: Attractive Sector with Strong Underlying Fundamentals
Attractive Sector with Strong Underlying Fundamentals Indian highways exhibit strong fundamentals, secular growth trends and stable regulations Growing urbanization and rising personal disposable income Bharatmala Pariyojana Phase 1 Secular growth Amongst the fastest growing vehicle markets In
Slide 38: Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline
Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline National Monetization Pipeline PM Gati Shakti Master Plan Monetization of INR 6 tn of brownfield assets, with stable revenue streams, Construction of INR 111 tn of greenfield assets in the core infrastructur
Slide 39: Regulatory Overview
Regulatory Overview Variety of PPP Models with a highly evolved & stable regulatory regime backed by well established contract structure through NHAI Model Concession Agreement NHAI has successfully attracted investments in the roads sector through and array of PPP models Build Operate Transfer (BOT
Slide 40: Bankable Concession Terms
Bankable Concession Terms Key positive of Indian Roads & Highways sector Typical terms Details NHAI is an agency appointed by the federal government for development of roads and highways in India NHAI as counterparty NHAI is a quasi-sovereign entity with a ‘AAA’ rating Well-funded by federal g
Slide 41: While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive
While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive Key sector trends 1 Weak bidding activity in FY22 2 Increased competition intensity 3 Monetization through TOT: A mixed bag Bids tendered for road projects (INR bn) MoRTH has provided relaxations NHAI had bid
Slide 42: Key Takeaways
Key Takeaways 1 Large pipeline of future growth with upcoming national & state highway bids 2 Proven credentials in the highways space 3 Significant improvement in financial metrics post GIC and Cintra -transaction 4 Access to complementary capabilities with Cintra & GIC 5 IRB 2.0 is well geared to
Slide 43: Appendix
Appendix Private & Confidential
Slide 44: Appendix I: Additional Financial Information
Appendix I Additional Financial Information Private & Confidential
Slide 45: Financial Summary (Yearly)
Financial Summary (Yearly) INR in Million Total all segments Construction Segment BOT Segment INR mn FY22 FY21 FY20 FY19 FY22 FY21 FY20 FY19 FY22 FY21 FY20 FY19 Revenue 63,554 54,875 70,472 69,026 44,786 38,223 52,105 47,098 18,768 16,652 18,366 21,929 EBITDA 33,492 27,016 31,664 31,329 16,418 11,94
Slide 46: Financial Summary (Quarterly)
Financial Summary (Quarterly) INR in Million Total all segments Construction Segment BOT Segment INR mn Q1FY23 Q4FY22 Q1FY22 Q1FY23 Q4FY22 Q1FY22 Q1FY23 Q4FY22 Q1FY22 Revenue 19,954 16,828 16,705 14,680 11,727 12,678 5,274 5,101 4,027 EBITDA 11,315 8,906 7,447 6,470 4,268 3,821 4,845 4,638 3,626 EBI
Slide 47: Financial Summary – Yearly Cash Flow
Financial Summary – Yearly Cash Flow Movement in cash position INR mn 2018 2019 2020 2021 2022 Opening cash balance 2,853 2,063 2,724 4,374 6,480 Construction EBITDA 12,543 11,977 15,576 11,940 16,418 BOT EBITDA 15,450 18,532 15,312 14,538 16,583 Distribution from InvIT 487 820 776 538 491 EBITDA 28
Slide 48: Offshore Bond Issue – Covenant Structure
Offshore Bond Issue – Covenant Structure Surplus IRB 100% Investments Business segment I 100% 51% 49% GIC Toll & HAM Private InvIT affiliates Business segment II 16% Vadodara Kim Construction Public InvIT Mumbai Pune TOT HAM Engineering, construction, Ahd Vadodara operation and maintenance of BOT Ga
Slide 49: Leverage Summary – Bond Covenant
Leverage Summary – Bond Covenant INR in Mn TTM ending TTM ending TTM ending Particulars June 30, 2022 March 31, 2022 March 31, 2021 Business Segment I: Toll & HAM Revenues 19,570 18,277 16,112 EBITDA 17,349 16,083 14,532 Gross Debt 101,983 102,541 97,711 Business Segment II : Construction + Surplus
Slide 50: BOT Toll Revenue Comparative – IRB and Private InvIT Projects
BOT Toll Revenue Comparative – IRB and Private InvIT Projects IRB Projects Amount in INR mn MUMBAI - PUNE ** AHMEDABAD VADODARA Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 2,309 2,470 1,167 2,373 3,606 52.0% Jun 1,041
Slide 51: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Yedeshi Aurangabad Agra Etawah Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun - 288 153 346 574 65.8% Jun 231 206 150 419 550 31.3% Sept - 253 274 382
Slide 52: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Solapur Yedeshi Kishangarh Gulabpura Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 174 181 90 167 308 84.6% Jun 344 294 146 209 303 44.9% Sept 169 15
Slide 53: IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices
IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices Cement price (INR per bag) 273 293 266 250 266 227 234 234 238 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 The 3 major materials used for road construction have witnessed a Reinfor
Slide 54: WPI Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment
WPI1 Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment with Increasing Interest Rates Toll rates are linked to inflation For NHAI projects that were bid for after 2008, toll rate is revised annually in April at 3% fixed rate, plus 40% of change in WPI for Dec
Slide 55: Appendix II: Overview of InvITs
Appendix II Overview of InvITs Private & Confidential
Slide 56: Contractual & Holding Structure for an InvIT
Contractual & Holding Structure for an InvIT Similar to a yieldco structure: Creating a liquidity platform for current and future investors Receives units in InvIT and dividend/interest subsequently Receives Dividend/Interest Receives Trustee Fees Step 1: The sponsor settles a trust (yet to be Spons
Slide 57: InvIT is a ‘Go-to’ Asset Aggregation Model
InvIT is a ‘Go-to’ Asset Aggregation Model Distribution oriented structure with transparent governance and tax efficient framework make InvIT an ideal asset aggregation platform for yield seeking financial investors InvITs provide highly attractive thesis for Financial investors…. Taxation on distri
Slide 58: Comparative Analysis of Different Categories of InvITs
Comparative Analysis of Different Categories of InvITs With similar tax benefits extended to private InvITs coupled with fewer restrictions on use of un-invested funds, private InvITs are more attractive Eligible infra projects Fund Raising Method Publically offered listed InvITs Privately placed li
Slide 59: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation and any subsequent discussions, which include words or phrases such as ‘will’, ‘aim’, ‘will likely result’, ‘would’, ‘believe’, ‘may’, ‘expect’, ‘will continue’, ‘anticipate’, estimate’, ‘intend’, ‘pla
Slide 60: THANK YOU
THANK YOU 59