Road infrastructure major IRB Infrastructure Developers Ltd will raise ₹5,035 crore through an initial public offering of its infrastructure investment trust IRB InvIT Fund.

This will be the first Indian InvIT to be listed on the exchanges. The issue will open on May 3 and close on May 5. It will have a price band of ₹100 to ₹102 per unit.

The bid can be made for a minimum of 10,000 units and in multiples of 5,000 units thereafter. The IPO will consist of a fresh issue aggregating up to ₹4,300 crore and an offer for sale of up to 34,761,770 units, by the unit holders.

An InvIT is a trust that owns and manages income-generating infrastructure projects. It allows public investors to directly invest in such projects and returns a portion of the income to the investors.

Addressing mediapersons on Tuesday, Chairman and Managing Director of IRB Infrastructure, Virendra Mhaiskar, said that in an effort to enable IRB to participate in the ever-growing opportunities of road building, it has been decided to unlock some of the capital in completed projects by transferring them to an infrastructure investment trust registered under SEBI regulations, which will be run by an independent board and professionals.

The trust will have six completed road assets covering 3,000 km spread across five States and an average balance concessions period of 16 years.

The trust will have 100 per cent ownership of all six road assets.

All the projects are concessions granted by the Central Government/NHAI and have robust bankable concession agreements, he said.

Mhaiskar said that IRB will use about ₹3,350 crore for repaying the external debt of the underlying SPVs, and the balance of about ₹1,700 crore would be utilised to pay back the sponsors.

The InvIT will offer 12 per cent yield to mutual funds and 10 per cent to HNIs post taxes.

The six assets have shown a CAGR of 11.4 per cent, he said.

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