IL& FS Transportation Network - Biggest BOT player in india in terms of Lane KM

Taken From there presentation:
1)IL&FS Transportation Networks Limited (ITNL) is a leading surface
transportation infrastructure company and the largest private sector BoT road
operator (in terms of lane kilometer) in India
2)ITNL has 14,680 lane km under its road assets portfolio comprising a mix of toll
& Annuity based projects
3)Has presence in other sub sectors viz. mass rapid transport system, urban
transportation infra system, car parking and border check post systems
4)ITNL’s International operations are primarily in the road segment and spread
across Spain, Portugal, Latin America, UAE and China
5)Operational portfolio of 9,439 lane kms of highways from 20 projects

Additional Points
1)They had a right issue recently at Rs 90 and raised around 800 crores
2)Managment is telling that there current protfolio will get completed by 2017 end (excluding srinagar sonmard tunnel project
3)Jorabat Shillong,Baleshwar Kharagpur Road and Thiruvananthapuram City Roads III should be completed by this quarter
4)CNTL, Kiratpur Ner-Chowk, Barwa-Adda and Khed-Sinnar will be completed Next year
5)Managment projection is they will collect 12.75 crore daily after completion of all these project (currently they collect around 6.75 Crores daily)
6)Madhyapradesh border checkpost to be completed by Jan 2016 and Rapid Metro phase II by Dec 2016

1)Huge debt and with every new project debt is increasing
2)Currently rapid metro phase I has a loss of around 120 Crores
3)Very Frequent Equity Dilution
4)Cost of debt is high (Averaging around 12.5%)
5)Sales Numbers are stagnant in last couple of years

1)Good Dividend yield
2)Managment guiding the profit will double after the whole current protfolio is completed by 2017
3)Good parentage (Some rumours of Piramal’s acquiring stake in parent company)
4)Sole bidder for Zojilla project for the last two times (project around 9000 Crores). They are execution two similar tunnel project currently
5)Expected to get a big project from nepal (Currently stuck in some court case)
6)Both the metro has lease of 99 years…
7)currently RBI have reduced interent by 125 basis points but banks have passed 30-40 basis points to them (interest burden is very high and can increase profitability drastically as interest rate are decreasing vice versa is a big risk to the story)
8)Managment and employees have shown confidence by increasing there stake via right issue

Disclosure : My second biggest holding in protfolio bought at a average of Rs 100

Useful Links,%202015.pdf


interesting idea…anything on the financials. The Company has been in limbo for quite some time and seems to be a blackbox. What is the real problem with the Company…Debt vs Gtrowth? Why other similar stocks in the industry have been able to come out or perform better but IL&FS continues to post miserable numbers. c) What is the value of receivables stuck d) How many projects out of the 20 operational are making money? These are some of the things that need to be addressed before a decision on investment can be taken. Piramal taking over could be a big trigger.


I will try to answer with my limited knowledge

Debt Vs Growth : Although the debt is high i think they are still bidding for new project with IRR of 20%+(thats the reason last year they didnt win any project but this year because of low competition they have won project worth 5000 Crores)

Other Stocks able to come out : As mentioned my managment the protfolio would go live by 2017 (Currently they are paying debt for both operational and non operational). So it would take around 18 months for that ratio to improve

Receivable Stuck : As per managment in Nov con call. There is no external Receivable . The only Receivable are from the spv whom they have supported and will be returned back when they are operational

out of 20 Pproject how much are making money :The major loss is from Rapid Metro phase I (120 Crores) and Jharkhand project(around 80 Crores). Annual report would be of great help.
For Rapid metro when i asked question in con call they told that :There was a drop in people coming from 35000 odd per day to 20000 per day because of increase in fare and introducing flat fare of Rs 20. but again they are getting an average of 35000 per day. And also the gurgaon development is also slow and even thats impacting it. Fiurther more i fear that new line which will be operational by DEC2016

Arun Kumar : Do post your findings too.

A group of foreign businesses are in talks with the operator of a US$2-billion expressway recently opened to traffic in the north to buy its operating rights, media reports said Tuesday.
VIDIFI, which built and operates the Hanoi - Hai Phong expressway, expects to finish the unprecedented negotiations by the end of the first quarter next year, news website Bao Dau Tu quoted a company representative as saying.
They plan to establish a joint-venture to operate the highway, according to the website. VIDIFI, a joint-venture between state construction firm Vinaconex and some local banks, will retain a 30 percent stake and the foreign investors, led by India-owned IL&FS Transportation Networks Limited, will buy the rest.

I am very positive as it is the leader and trading at cheapest valuation on M.Cap to sales or EV/EBITDA or even P/B. It fell due to EPS fall, but the fact is that in 2015 and 2016 and 2017 it will zoom again. Govt is giving a lot of BOT projects to road construction fellows. I have a very long position in it, due to management quality and foreign portfolio too.

How much profit can it show in fy 17-18 according to you?

Expressway proposed

Two bidders, one of them a four-member consortium including a giant Indian firm, have expressed interest in building an 84.5km expressway between HCM City and the Moc Bai Border Gate in the southern province of Tay Ninh, according to a transport ministry source.

The consortium comprising India’s IL&FS Transportation Networks Limited (ITNL) and the local Thai Son Investment Development JSC (under the Ministry of Defence), Cai Mep Investment JSC, and Red River Construction Investment and Trading JSC wants to build the expressway under the build-operate-transfer (BOT) mode.

A spokesman for it said since the constituent companies have strong financial capability and experience in developing transport projects in Viet Nam, they can complete the work on schedule.

The three domestic companies are involved in major transport projects in Viet Nam, while ITNL is the largest public-private partnership (PPP) and BOT operator in infrastructure in India.

ITNL’s annual revenues from operating BOT projects top US$1 billion. It has acquired a 49 per cent stake in the Ha Noi-Hai Phong Expressway, which opened to traffic on December 5.

Their rival for the HCM City-Moc Bai Expressway is the State-owned Cuu Long Corporation for Investment Development and Project Management of Infrastructure (Cuu Long CIPM), which also seeks to build it under BOT mode with funding from the Government.

According to Cuu Long, the highway will be built in two phases.

The first phase will comprise a 4km stretch of Beltway No 3 in HCM City and a 51.5km section from the beltway at a total cost of VND16.36 trillion ($725.7 million).

The second phase will include a 20km viaduct on the Trans-Asia Highway and a 9km viaduct on National Highway No 22 at a total cost of VND15.5 trillion ($687.6 million).

Cuu Long CIPM has suggested using funding from the Government’s coffers, including ODA loans from the Japan International Cooperation Agency and the Asian Development Bank.

If approved, work on the expressway will begin in the first quarter of 2018 and the road will open to traffic in 2021.

The expressway will run up to the intersection of National Highway No 22 and Provincial Road No786 in Tay Ninh’s Ben Cau District.

Cuu Long proposes building four lanes in the initial phase before expanding it to six lanes later.

According to Ministry of Transport consulting firm Transport Engineering and Design Inc. South (Tedi South), the expressway can accommodate around 62,000 PCUs (passenger car units) a day by 2040.

Once finished, along with National Highway No22, the Ho Chi Minh Road, Beltways Nos 3 and 4 in HCM City, the expressway will form a trans-national road network connecting cities like Bangkok, Phnom Penh, and HCM City.

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Danny Samuel, Head of Corporate Business Strategy at IL&FS, said the agreement to transfer the toll right to the company was signed during Vietnamese Prime Minister Nguyen Tan Dung’s visit to India from October 27-28.

Under the contract, IL&FS will buy a 49% stake in the project while the remaining 51% will be retained by the Vietnam Infrastructure Development and Finance Investment Company (ViDiFi). The money will be transferred to ViDiFi at the end of 2015.

IL&FS will also have to pay 49% of the estimated interest during the period of 31 years in 2018.

The company said it would employ new toll collection technology to avoid losses and prevent overloaded vehicles from travelling on the expressway in order to ensure road quality and minimise maintenance costs.

Vietnam’s Ministry of Transport is planning to sell the toll collection rights on a number of expressways as a measure to ease constraints on the budget for transport infrastructure development.

MY Question: Why should ITNL pay all the interest in 2018??? Any Idea

We Didnt win Zojilla project. A Big set back. We were the single bidder two times…

Another BOT project worth 2000 Crores won today

IL&FS Transportation Networks Ltd has informed BSE that the Concession Agreement for development of 4-laning of Amravati-Chikhli (Package-I) section of NH-6 in the State of Maharashtra from Km. 166.000 to Km. 360.000 has been signed by Amravati Chikli Expressway Limited, a wholly owned subsidiary of the Company with National Highways Authority of India on Build Operate Transfer (BOT) basis (“the Project”) on September 08, 2015.The Project is on Toll basis with a Concession Period of 19 years including Construction Period of 910 days and the estimated cost of the Project is Rs. 2,288.18 Crores. The Company had quoted a grant of Rs. 183.05 Crores for Project

Read more at:

Jorbot shillong completion certificate received. :slight_smile: Added more on this news today. Companys fortunes will change. Even the disclosure on how they spent the money received from right issue is very encouraging and shows managment’s honesty a key factor to look out when investing in midcaps

hi ,

an new to the discussion . have been holding this company since last 12 months and trying to understand it’s business profile and earning trajectory . i have few questions in mind … if some one can help solve it …

  1. in their presentation every project is bifercated by lane km , project cost , debt outstanding and grant . can any one explain how to ascertain rest of the project funding is already paid of from revenue of toll/annuity ?? what exactly do they mean by grant ???

  2. going by their first project of noida toll bridge ( present holding only 25% ) , project seems to have ben well rewarding for shareholders …however if someone have worked out what exactly would have been return for shareholders in noida toll since starting of working of project ( including dividend ) ???

  3. are there any guidance available for what would be traffice projections for all other projects already under operations ??

  4. what would be further debt requirement of company for next 2-3 year ??? ( debt as on 31st mar is 23513 cr. ???

senior vp’s help needed … thanks guys


Though the company have huge order book and continues to bag orders, it has been showing losses. The share have already fallen from 215 level to 70 level. I think the whole IL&FS is a black box, they they boast of a big promoter (The bin Laden group) however they are yet to show more capital infusion and profits.

This is a big problem with road builders. Although many such companies may earn lot of money from building roads, they will under-report profits and take out money by some means. Why pay 30% taxes when you can keep everything.

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  • Currently 10000 crores worth of project are going to get executed in 2016. Today they got completion certificate for BKEL.

  • TRDCL -III and MP Border check post can also get complete any time soon.

  • This year the project which are expected to get completed:

  • Apart from this rapid metro phase II should also get completed by DEC 2016. Toll/Annuity collection should get doubled after these project get completed. CNTL alone will add 700 crores of revenue income per year.

  • The current average cost of DEBT is really high at 12 %

  • Last year Rapid metro Phase - I had a loss of 100 Crores. Now they have reduced there exposure by 50% so the loss should also get reduced.

  • In the recent con call Company expect consolidated DEBT to be peak out at 29500 Crores.

I am new to evaluating companies.Please do let me know if i am missing anything here

You are missing management integrity. In short term, they may do good but

“Somebody once said that in looking for people to hire , you look for three qualities: integrity, intelligence, and energy . And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.” –Warren Buffett

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Could you please help me on how to get data points on evaluating management.
Few Points which i considered:

  • Good Dividend track record
  • Conference calls
  • Best annual report award for last three years
  • No negative on googling about their management
  • Detailed presentation
  • recently they got money from right issue which was audited and report was sent on how it was utilized

Thanks for posting these factors. They do form an important part. If you have already looked at these and assured that management is good, then thats great :+1:

For me personally, high debt and an industry marred with poor management ethics (not specifically this company, but the peers in general) is enough to not get into details.

One factor i will like you to remember is that many new projects have started in last 12 months. And if you go through there presentation toll revenue for a project doubles in fifth year as compared to first full year of operation of a project. So have patience as it will turn around in this fiscal year.
Also it is paying debt on 5000cr debt taken by holding company in projects that are about to be Launched. So that will add to cash flows.

The thing which i consider negative is their execution:

  1. CNTL project which they were suppose to complete by MAY 2016 has be postponed to SEP2016…
  2. Not able to do financial closure for five projects (bewar gomti and four projects received recently)
  3. No time line for gurgaon metro II phase . Earlier theysaid it to be dec 2016

But that doesnt justify the current stock price any how…
Construction activity shown a good pick up.
Marginal increase in debt.

Guess it will take one three more quarters for companies income to stabilise and we will see good profits after that for years to come. CNTL project completion will make a big change in companies number. Till that we have to live with low stock price and average results (if no stake sale is done)