Ind-Ra upgrades IRB Infrastructure's long-term issuer rating to ‘IND AA-'; stock slips ~1%

17 Aug 2022 , 03:39 PM

IRB Infrastructure Developers Limited informed that India Ratings and Research (Ind-Ra) has upgraded its Long-Term Issuer Rating to ‘IND AA-’ from ‘IND A+’. The rating agency assigned a Stable outlook.

Company’s non-fund-based facilities are worth Rs1200 crore. Ind-Ra has reaffirmed the short-term rating at ‘IND A1+’, while the long-term rating upgraded.

Instruments reviewed also include Non-Convertible Debentures (NCDs) worth Rs400 crore.

The upgrade reflects a significant deleveraging fueled by equity raised in FY22 from the Singaporean sovereign wealth fund, GIC, and Cintra, a healthy outlook on profitability highlighted by a robust order book, and the likelihood of maintaining the robust credit metrics, driven by asset recycling and funding options through its private and public InvITs.

The agency anticipates that IRB will maintain its construction revenue of Rs45-50 billion between FY23 and FY24, with an EBITDA margin of around 25%.

Over the medium term, the company is likely to maintain a healthy credit profile and financial flexibility, with net leverage remaining around 1.5x, stated Ind-Ra in its rating rationale.

IRB Infrastructure Developers ended at Rs255.50 down by 1.26% from its previous closing of Rs258.75 on the BSE.