Block deal: IRB Infra shares plunge 10% amid high turnover; stock down 18% in 2 days

IRB Infrastructure Developers Ltd plunged over 10 per cent in Tuesday's trade as nearly 42 crore shares changed hands on NSE amid reports Cintra, a toll road subsidiary of the Dutch major Ferrovial, likely offloaded up to a 5 per cent stake in the civil construction company today via block deal.

IRB Infra shares plunged 10.20 per cent to hit a low of Rs 63 on NSE, taking its two-day fall to 18 per cent. The stock fell 9.05 per cent to settle at Rs 70.15 on Monday. Cintra, the arm of Dutch company was looking to raise about Rs 1,900.29 crore ($227.8 million), as per a term sheet reviewed by ET. Business Today could not independently verify the report.

Cintra held a 24.86 per cent stake in IRB Infrastructure under the name of CINTRA INR INVESTMENTS B V as on March 31, according to BSE filings. This marks the second block deal in IRB Infrastructure in the last 15 days. On May 30, 2024, IRB promoters sold 4 per cent of their stake in the company through a block deal, ET reported.

Cintra, as per the ET report, has offered 30.10 crore shares for sale with a floor price ranging from Rs 63 to Rs 70.16 per share. This represents a 10 per cent discount from the lower range compared to the closing price on Monday, ET reported. Jefferies and HSBC are seen acting as bankers for the deal.

In December 2021, Cintra acquired a 24.86 per cent stake in the Indian company IRB Infrastructure Developers for €369 million.

On recently proposed guidelines by the RBI, IRB does not see any further impact on its financials as banks are already charging higher interests for under-construction projects by 60-70 bps against operational projects.

"The company expects considerable orders worth Rs 2 lakh crore over the next 12-18 months in BOT toll and it expects to win Rs 25,000-30,000 crore (~15 per cent market share). We have recalibrated our EPS estimates higher to factor in better growth and resultant improvement in margins owing to the mix. Given the improving outlook on ordering, better-than-expected toll growth and likely interest rate cuts, we increase our SOTP-based target price to Rs 72 per share. Owing to the limited upside on CMP, we maintain our ADD rating on the stock," HDFC Institutional Equities said.