On June 11, two block sales totaling Rs 2,656 crore witnessed the exchange of 41.20 crore shares, or 6.8% of the shares held by IRB Infrastructure Developers. This transaction, which was carried out by Cintra, an affiliate of Ferrovial, was executed at an average price of Rs 64.40 per share.
It has started a 150-day lock-in period before additional stake sales. The stock fell 10% after the deal, despite having gained 70% year to date.
Specifics of the Block Deal :
On June 11, IRB Infra underwent a dramatic change when two block sales totaling 41.20 crore shares, or 6.8% of the company, were completed. At an average price of Rs 64.40 per share, these trades had a total value of Rs 2,656 crore.
It was claimed that Cintra, a significant Dutch infrastructure affiliate of Ferrovial, was aiming to sell about 5% of its interest in order to raise about $228 million, however the precise parties involved are yet unknown.
Effects of the Stake Sale :
The sale not only affected the price of IRB Infra’s stock, but it also made Cintra subject to a 150-day lock-in period. Cintra is unable to complete any block deals to sell off more of its IRB Infra investment during this time.
Cintra’s ownership position in the business was 24.86 percent as of the end of the March quarter in FY24. The investment banks assisting the deal were Jefferies and HSBC.
Stock Performance and Market Reaction :
IRB Infra’s shares saw a 10% decline after the news, and by 9:36 AM, they were trading at Rs 64.74 on the NSE. IRB Infra has performed admirably in 2024 despite this decline, with the stock yielding returns of about 70% so far this year. The decline was perceived as a transitory obstacle in light of the stock’s robust overall appreciation.
Recent Accounting Results :
Recently, IRB Infra has been growing thanks to rising toll prices and optimistic market perceptions about the Modi government’s ability to continue developing infrastructure. The corporation revealed last week that toll collections increased by 30% year over year to Rs 536 crore in May. It is anticipated that this surge will persist, propelled by the newly imposed toll tax hikes starting in early June.
future prospects :
IRB Infra’s management is nevertheless upbeat about the future and believes that toll collections will pick up more steam. The most recent tariff increases, which are anticipated to have a major impact on revenue growth in the upcoming months, are the source of this optimism. Investors are keeping a close eye on how these changes may affect the company’s earnings and stock price.
In Conclusion :
Recent block deals and the ensuing stock market meltdown serve as a reminder of how volatile the stock market is and how big transactions affect investor mood. Despite the unfavorable initial response, IRB Infra has a bright future ahead of it thanks to its impressive 2024 performance and the anticipated boost from higher toll prices. A layer of stability is added by Cintra’s lock-in period, which forbids any rapid large-scale share dumping and gives the market time to process and respond to these changes.