The yield is factor of market perception about underlying assets, sponsors and liquidity situation. Since this are hybrid instrument, we need to take into consideration likely cashflow from existing and expected future assets. We do not have any information about potential acquisition over life. However, we may assume that sponsor would have taken sufficient care while acquring assets for the InvIT. That is VERY BIG assumption in this investment and that is reason why despite lower distrbution of Rs 3 per quarter by IndiaGrid InvIT as compared Rs 3.05 per quarter by IRB InvIT, we find IndiaGrid InvIT Trading at price of around Rs 92/unit while IRB InvIT trading at Rs 76-77/ unit.
Further volatility in road sector is presmued to be higher than grid transformer assets where agreement with central utilities are giving more stable cashflow to IndiaGrid while inflow from IRB InvIT would be function of traffic, which is volatile and hence determine final distribution to IRB InvIT investor .
Third factor of difference is assets owned by IndiaGrid would be continue to owned by them even after completion of agreeement after 25-30 years (which provide whatver limited but terminal value to InvIT) while Road projects would be handed over by IRB InvIT to Government after compleition of concession agreeement.
I am just comparing two listed InvIT so that one get better perspecgive about opportunities in the hybrid investment space.
On your specific question about yield, the sponsor as well management have given indication of around 13-14% yield. Yield is also function of interest rate of loan taken by InvIT, expected traffic flow (yield may remain same but cashflow timing may differ. If traffic is lesser than projections, the concession agreement would provide increased tenure, which mean lesser cashflow in medium term but higher cashflow in end providing same yield). It would also vary based on new acquisition of assets where we have rely completely on managment which is the most critical factor in investment in my view.
Enclosing image of expected cashflow distribution for IRB InvIT which was provided in one of the presentation for your reference.
In third point, to address this concern, the sponsor is expected to hold minimum 15% stake during the life of InvIT. While it may align interest, still there is possiblity of transaction being not at arms length. The valuation of infrastructure assets over life is factor of cashflow and discount rate and there are no guarantee that assumption at time acquisition would be valid throughout the life of assets.
In the 21 message of thread you wanted to understand process about transfer from IRB to IRB InvIT. While there are indpendent valuer and board which would are also expected to protect interest of investor, I would suggest that investor himself/herself shall do working on structure and understand dynamics of underlying cashflow and yield to make decision of investment. For instance, IRB InvIT has assumed increased tenure of road assets (Surat Bharuch as well as Dahisar Surat) due to earlier lower traffic generation then projection. However, in process, the company need to approach NHAI for approval along with all supporting documents. Normally, NHAI does take decision in line with concession agreeement to provided to required yield on assets, still there is probability that NHAI may delay/deny extension of concession period or increased in toll charges (despite increase in inflation) which may have adverse impact on yield of IRB InvIT.
Last point is the major cashflow currently for IRB InvIT are coming from Dahisar Ahmedabad (two road project) which would be completing there tenure in next 2-3 years. In case there are not new addition to assets and other 5 assets are not able to show improvement in traffic, then there could be lower distribution to InvIT investor. While management did indicated around Rs 3 per unit distribution per quarer (annual around Rs 12 per unit) for FY19 and FY20, one has to account for this factor to take investment decision.
Discl: I am invested in IRB InvIT and IndiaGrid InvIT. The investor shall undertake own due diligence before investment, more because of structure and also minmium investment lot of Rs 4-5 Lakhs. My understanding of strucutre and cashflow may be completely wrong and investor shall not rely on same.