Speaking to CNBC-TV18, VD Mhaiskar, CMD of IRB Infrastructure Developers said that the company’s current order book is at Rs 2,300 crore, out of which Rs 1,000 crore would be executed in the next two years. The Bharuch-Surat project will be completed by FY09, he said. 

He informed that the company collects Rs 1 crore revenue as toll on daily basis currently.

Currently, IRB Infrastructure Developers has a portfolio consisting of 12 toll road projects, out of which 11 are operations, Mhaiskar said. Real estate forms a very small portion of revenues, he said. 

Excerpts of CNBC-TV18’s exclusive interview with VD Mhaiskar:

Q: There have been several concerns on the kind of valuations your stock has come in with, or your issue has come in with. Can you just start off by talking a bit about what your company’s targets are in terms of revenues and profits for FY09?

A: I think clearly, we can’t talk about the estimated profits going forward as per the Sebi regulations. But if we have to look at the order book, the present order book is around 2,300 crore of which almost 1,000 crore order is to be executed over the next two years, including this year.

On the toll revenue side, which is one of the main portion of our revenue, we collect close to Rs 1 crore on a daily basis today. Typically, the way this business goes up, there is a volume growth and also a tariff growth attached to it. As a result, the revenues keep on increasing on the toll revenue side.

Q: Do you think you priced the issue very aggressively, because it seems in valuation terms much more expensive than your peer set?

A: I would say that typically, all the peers that we have in the sector today, are also in various other sectors. A pure toll road play is something which is not there in the industry today. I think our operational toll road portfolio, the way we have today, I think a clear-cut peer in this industry today is not there.

I would also like to stress that a P/E multiple valuation look in for this business may not be the right idea. This is a DCF valuation which one will have to look at because this is a steady cash flow over the concession period, which we have in the business.

Q: Why don’t you tell us how much you will get from tolls over the next couple of years on an annual basis and which roads will contribute to it?

A: Today IRB Infrastructure has a portfolio of 12 toll road projects out of which 11 projects are already operational. We are collecting close to Rs 1 crore on a daily basis. The Bharuch-Surat project which we are executing at this point, is scheduled to be completed by June ’09, after which the revenues on this project also would start.

As we have already declared in the RHP, we have emerged as the highest bidder for the Surat-Dahisar project, which would be a very big project coming forward.

Q: For the big one though, the NH-4 Mumbai-Pune project, are you getting tolling rights as well?

A: Yes we are collecting toll on the Expressway as well as NH-4. It was a joint bid that was asked for by MSRDC and we have completed the upgrading of the NH-4. Today we are collecting toll on both, the Expressway and the NH-4.  

Q: What exactly are the real estate plans for IRB Infra?

A: Real estate forms are very small part of the total business today. We are developing a township along the Bombay-Pune Expressway, around 20 kms before Pune.

Q: We have penciled in about 1100 crore in revenues next year for you, is that conservative or aggressive?

A: I think it is a guess which we would definitely like to achieve.

Q: Easily, surpass it quite a bit?

A: That would be difficult to say.

Q: What is the feedback you are getting on the last day?

A: We already had a good round of institutional investors and HNIs. I think the response has been phenomenal.

Q: You are not fully subscribed on the last day?

A: Yes, but I think typically having scheduled the issue over a weekend, we feel that it would be a good subscription by the end of the day, today.