RInfra revises InvIT issue size downwards to Rs 2,500 crore

InvIT to hold seven against earlier planned 10 road projects

Anil Ambani-led Reliance Infrastructure will now raise Rs 2,500 crore through its planned infrastructure investment trusts (InvITs), lower than the earlier planned Rs 3,000 crore, according to sources with direct knowledge of the development.

Sources added that the company has filed a revised Draft Red Herring Prospectus (DRHP) with the market regulator Securities and Exchange Board of India (Sebi) for an amount of Rs 2500 crore and seven road projects. In the earlier proposal, the company planned to place ten of its road projects in the InvIT structure.

The downward revision in the value and number of projects is due to necessary approvals from the National Highways Authority of India (Nhai). The central road agency does not allow for 100 per cent ownership transfer for projects which have not completed two years of operations. Three of the ten projects that the company planned to list had not completed two years of operations. The InvIT fund is likely to have the first right of refusal to acquire the pending four projects once they meet the regulatory requirements. RInfra’s road division consists of 11 toll road assets and different stages of operation.

With the DRHP filed, sources add, the company will now look to launch its InvIT by June. Once complete, proceeds from the InvIT are to be used to reduce debt at the company level and the is expected to reduce debt in the range of Rs 3,200 crore to Rs 4,000 crore. The total toll revenue for the seven projects is pegged at Rs 400 crore.

InvITs are trusts which invest in infrastructure projects, either directly or through special purpose vehicles. InvITs allow companies to unlock tied-up capital and also aid in financing and refinancing projects. Mumbai-based IRB Infrastructure is the first company to launch an IPO for its InvIT in India. The success of this InvIT is likely to set the tone for the pending InvIT listings in India.