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India Infrastructure Finance Company Ltd (IIFCL), a government company, will look to more than treble its exposure to Infrastructure Investment Trusts (InVITs) to about ₹3,500 crore, PR Jaishankar, Managing Director & CEO, has said.
“We had an InVIT exposure of ₹975 crore as of end March 2022. This fiscal, we have already sanctioned ₹2,400 crore for investing in debt instruments of InVITs. If the sanctions convert into disbursements, I will easily cross ₹ 3,000 crore. But I am aiming more”, Jaishankar told businessline here.
He also said that IIFCL will for now only look to invest in the debt instruments issued by InvITs. There are no plans to invest in the equity side although there are approvals from government for it, Jaishankar added.
It maybe recalled that IIFCL had, in February, invested ₹325 crore in the non convertible debentures (NCDs) issued by KKR-backed InvIT Virescent Renewable Energy Trust (VRET). This investment marked the entry of IIFCL in the infrastructure debt market by subscribing to Infrastructure NCDs issued by an InvIT.
InvITs could be set up for sectors defined under the infrastructure as per RBI guidelines. So far, developers engaged in the road, power transmission, gas pipelines and tower transmission have formed InVITs.
Typically, InvITs — regulated by SEBI — is designed to pool money (small sums) from several investors to be invested in income-generating assets. InvITs are mostly structured as trusts, and an independent trustee holds assets on behalf of unitholders..
InVITs present attractive investment opportunities and are expected to take wings given the huge likely government outlay for infrastructure projects. The government had already identified InVITs as a way to attract large institutional long term investors in infrastructure space.
PROFIT GROWTH
Meanwhile, Jaishankar said he was confident that the overall profit growth trend recorded by IIFCL in recent years will be sustained in current fiscal as well.
“We are confident of sustaining profit growth trend, but it also depends on how interest rates move”, he said.
IIFCL had in 2021-22 reported a standalone net profit of ₹ 514 crore, up 80 per cent over net profit of ₹ 285 crore in the previous fiscal. IIFCL had recorded net profit of ₹ 51 crore in 2019-20.
Asked about the performance of IIFCL’s UK arm, Jaishankar said that the subsidiary had turned around and come back to profitability in 2021-22. “This year they have wiped out accumulated losses and their capacity has enhanced. They are also now raising their own lines and assisting marque projects”, he added.
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