IRB is down 17% over the past 4 days vs the BSE Sensex down 3%, on concerns around financing costs and funding availability. This sell–off has been compounded by continued weak award activity from NHAI over the past 5 months and concerns on the central government’s reduced ability to push through further reforms given recent events (2G spectrum allocation and banking investigation, state elections results).
IRB's main bankers are Canara Bank and IDFC Ltd. accounting for about 70% of current debt outstanding.They started construction of two new projects recently (driving est. 78% sequential increase in Dec Q construction billings) and would start tolling on two new projects in March 11
Goldman SAchs' 12-m SOTP-based TP of Rs315 (55% upside) is lower than earlier by 7% as we build in 20% of the potential value of projects in the pipeline vs 50% earlier, given the slow award activity seen over the last 5 months
