IRB InvIT eyes third-party road assets to expand portfolio

IRB InvIT Fund is looking to acquire third-party road assets for expanding its portfolio even as it continues to take over operational projects from its sponsor IRB Infrastructure Developers.

The trust, which currently has seven projects in its portfolio, will be adding Solapur-Yedeshi Tollway project, which will be eligible from the end of this fiscal.

"We will continue to add projects in our portfolio and we are not just looking at those of the sponsor's, but we may also consider third-party assets for acquisition if they are giving good valuations," IRB InvIT Fund chief financial officer Tushar Kawedia told PTI.

He further said the company would look at acquring third-party assets only after evaluating whether the projects give higher returns to the unit holders, if there is an imporvement in the yields and the debt risk associated with the assets.

When asked how the company was planning to fund these acquisitions, Kawedia said, it will be done through debt funding.

"As the trust is eligible to raise debt at 1:1 ratio, the total debt that can be borrowed is close to Rs 4,500 crore. We can borrow the debt in the range of 8.50-8.75 per cent rate of interest. Hence, new acquisitions would be through debt, as it is the most viable option," he added.

IRB InvIT Fund reported a revenue of Rs 292 crore for the quarter ended September, against Rs 251 crore in the year-ago period.

The company has declared the distribution of Rs 3 per unit for the second quarter of FY19, a cash flow distribution of Rs 174 crore.

"This is the sixth consecutive quarter, where we have successfully maintained a payout of atleast Rs 3 per unit, even with transport strike for over a week during the quarter," said Kawedia.