Road developer BRNL files DRHP for IPO; seen raising up to $83.5 mn
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SREI Infrastructure Finance-promoted Bharat Road Network Ltd (BRNL) on Friday filed a draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).

The IPO comprises a fresh issue of 2.93 crore shares. This results in an approximate stake dilution of 34.9% in the company’s equity capital. The IPO size is estimated Rs 420-560 crore ($62.59-83.5 million). This will value the company at Rs 1,604 crore ($240 million).

BRNL joins a host of other infrastructure and construction firms such as PSP Projects Ltd, Dilip Buildcon (which completed its IPO in August), GR Infraprojects Ltd, Shankara Building Projects Ltd and GVR Infra Projects Ltd which are looking to tap the public market.

Other infrastructure firms that went public in the past couple of years include Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd and MEP Infrastructure Developers Ltd. 

Snapshot of the issue

Issue:The IPO comprises a fresh issue of 2.93 crore shares, according to the DRHP. This will result in a stake dilution of roughly 34.9% stake in BRNL. 

Use of Proceeds

The company aims to sponsor the Solapur Tollways Pvt. Ltd (STPL) project with a Rs 51.47 crore infusion. The sponsor investment for the project will be used by STPL to carry out activities for its Solapur-Maharashtra/Karnataka border section of NH-9 from km 249.00 to km 348.800 in Maharashtra.

In addition, BRNL aims to acquire subordinated debt—in the form of unsecured loans, warrants, optionally convertible debentures (OCDs) among other debt instruments—worth Rs 372.25 crore held by SREI Infrastructure. The company will use an undisclosed amount for general corporate purposes.

Merchant bankers

Inga Capital Pvt. Ltd, Investec Capital Services (India) Pvt. Ltd and Srei Capital Markets Ltd are financial advisors for the IPO.


Khaitan & Co is representing the company as legal counsel while Bharucha & Partners is legal advisor to the merchant bankers.


BRNL is a road developer engaged mostly in build-operate-transfer (BOT) projects. Currently, the projects under BRNL are implemented and held through special purpose vehicles, either through its subsidiaries or in partnership with other infrastructure players. 

Incorporated in 2006, it focuses on development, implementation, operation and maintenance of road and highway projects.

As per scheme of arrangement dated 16 February 2017, all road and highway assets of SREI would be managed by BRNL. It has projects in Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra and Odisha through partnerships with EPC players in the local space where the project is located. 

At present, BRNL has a project portfolio consisting of six BOT projects, of which two are operational under final COD (date of commencement of commercial operation of project), three are under operational under provisional COD and one is under construction. 

Its projects operational under final and provisional CODs cover approximately 1,622.44 lane kms, including major and minor bridges. The company’s project under construction involves development of 400.24 lane kms, including major and minor bridges.


BRNL reported a loss of Rs 29.32 crore on consolidated revenues (operations) of Rs 8.3 crore for the eight months ended 30 November 2016. For full financial year 2015-16, it reported a loss of Rs 49.84 crore on revenues of Rs 75 lakh, as per the prospectus.

The firm has just under 50% stake in a clutch of projects whose revenues are not part of the firm as they are not subsidiaries. The sole wholly owned project is still under construction.

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