IL&FS Invites Bids for Paradip Water Supply Project

Mumbai: In a strategic move to address its group debt, IL&FS has officially invited expressions of interest for the sale of its entire stake in Paradip Refinery Water. This project is crucial as it supplies treated water to Indian Oil’s refinery in Odisha. The sale, which received clearance from NCLAT in November 2024, is a significant part of IL&FS’s broader resolution plan.

Financial Implications and Project Details

The sale is expected to resolve IL&FS group debt by Rs 900 to Rs 1000 crore, contributing to the total of Rs 57,000 crore of group debt addressed since the government appointed a new board in October 2018. Paradip Water, established in November 2009, operates under a 25-year BOOT agreement, ensuring a steady revenue stream from fixed annuities, transport fees, and index-linked variable charges.

Investment Opportunity

IL&FS is looking for firms with a net worth of at least Rs. 1,080 crore and relevant pipeline experience. The sale, covering 17.7 crore equity shares, presents a unique investment opportunity with potential tax benefits due to Rs. 197.9 crore in unabsorbed depreciation. EOIs are due by 5 PM on September 9, with Kroll advising on the deal.