M&As in road sector pick up over easier exit norms: Icra


M&As in road sector pick up over easier exit norms: Icra

The country relaxed the exit policy for road projects under the public private partnership (PPP) model in May 2015. The policy move is showing results with a higher quantum of deals seen in the road sector in the last two year’s time, according to rating agency Icra Ltd.The rise in deals, however, may not have brought cheer to a good number of road-project sponsors, as Icra data suggests 31 per cent of the deals in the last two years were made at a loss to the investor.”In about 31 per cent of the transactions, the return to the developers is negative, indicating loss on investment. Developers with weak credit profiles are the ones who disposed their assets at a loss as liquidity took precedence over profit-making for them,” said K Ravichandran, Senior Vice President and Group Head, Corporate Ratings, at Icra. Read more

Credits: business-standard.com

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