Completely agree. But why it trades at such a huge discount. Most other Invits trade at reasonable or no discount which can be attributed to market inefficiencies.
Why it was not able to issue new units like Brookfield to raise funds? E.g. if it was able to issue new units to institutional investors at little discount to NAV e.g. 85, it would acted as a confidence signal to market.
Obviously the set up is to benefit the development focused Private Invit to encash and move for next asset. If you consider the Grant Thronton attached valuation report. 3 target asset has NAV of 5068 Cr. IRB Invit will pay 4905 Cr to acquire the same. You can compare this discount to what market is giving to listed invit ,NAV of INR 85 per unit to traded value of INR 55.
Based on NAV, I think we as unit holder shall ask for exchange of assets of IRB private INVIT and assets of public invit. Diffrence payable by either side.
By the way, can you post report or link?
Here is the link to valuation report and details of assets being acquired from private Invit. We need to ask the management on IRR specifically. And figure out how much can retail investors influence the decision. Now they will need to raise additional equity so we will know what price can they possibly raise the equity at.
Private Invit and public invit assets cannot be exchanged as private invit has assets at development stage (and more risk), which public invit can not have ( I think limited to 10%).
Indigrid InvIT has floated a new entity with which they will tie up to bid for new projects. New entity will develop and Indigrid will take over assets once operational. Worth listening to latest Indigrid concall.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/587e9555-833d-4c90-8cd7-65c26b528f49.pdf
Here is the link to latest IRB InVIT concall. Lot of questions on potential asset acquisition. Management talked about an IRR of 13-14% which needs to be confirmed. Given that this would be a related party acquisition, minority shareholders will have a greater say.
Here is a link to voting rules for related party asset acquisition by public Invits.
https://www.perplexity.ai/search/5e5517c8-9b88-4cdf-b5cd-2a59bc459647
Does anyone has any further analysis done?
Kindly share.
How much is impact of this on road InviTs. Most car owners who travel atleast once a month are planning to go for this.
These two items caught my attention while going through the Credit Ratings.
The traffic under the project stretches are prone to the risk any up-coming network development or improvement in existing stretches. Under the InvIT’s portfolio, major diversions in the near term are present in IRBJDTL, KGTL and IHMTL from Delhi Mumbai Expressway (IRBJDTL, KGTL) and Ganga Expressway, respectively (IHMTL). [KGTL and IHMTL are 2/3 assets they are planning to acquire soon]
The deferred premium along with interest as on 31 March 2025 stood at INR7,130 million. The deferred premium needs to be repaid, along with an interest rate equal to 2% above the RBI bank rate from the surplus cash flows FY25 onwards.
Traffic dropping below 90 percent of last year average gets compensated by NHAI and there are instances of these compensations in Jaipur toll road.
Deferred premium along with interest is kept in separate escrow as I remember and part of all NAV computations
Are there any reasons for IRB INVIT trading at discount to NAV? All other Invits are trading at premium after the RBI rate cuts.
I would also like answer to this question.
By the way, IRB InvIT’s NAV per unit at fair valuation is ₹95.64 as per the most recent valuation report, while the CMP is ₹62.90 which is more than 34% discount to NAV.
1005 crores to L&T and Sponsors of the trust at 62.95 (Today’s closing price in NSE was 61.65)..I was hoping for a 5 Rupee premium at least but that did not happen…
Only good thing I see in this is a credible name of L&T, although it is for a paltry sum
More institutional placing and floor price is 62.69
The asset addition is going through the slow grind of approvals..
I am sure what is on everyone’s mind, after all this acquisition and servicing of debt plus so many things changing constantly with respect to the tolls (contractual protections are there but NHAI machinery is a slow turning wheel and it takes time to ferret out every rupee), what will be the DPU? I think, we may have to wait for 1-2 quarters before all this plays out…
Disc : Invested and hence biased
QIP @ indicative price of 60
Dear all, considering equity dilution & income generation from the additional 3 assets, what could be the payout from now onwards? Can we expect 10 rs per year(currently they are paying 8 rs)?
if they will be able to pay 10 Rs, then it will be a pretax yield of 16 % in today’s price. I am sure that if that is the kind of DPU, those putting in the money will be compelled to come in at much higher price than 62.xx. Afterall, it is still a AAA…I will be happy if they maintain 8 DPU since that will be over a longer tenure, after this asset addition
I think the Sponsors (IRB Infrastructure Developers) investing ₹750 crores into InvIT through preferential issue shows their confidence in the future revenues. I wonder how else could one see this.
–
Any idea why L&T participating through preferential issue while there is also QIP?
Do not read too much in promoters participation, they have sold 8K worth assets and investing 750 Cr. The promoter’s commitment and integrity is all the time questioned. Who r trapped, continue to rip 8Rs per Q. Don’t expect anything more than this.
Its just a way to cash out by transferring assets from its private InvIT (IRB Infrastructure Trust) to the public InvIT (IRB InvIT Fund).
In IPO lingo, Promoter doing OFS + putting a small slice into fresh issue.
The quality of cash flows from those three assets is more important than equity dilution.
Disc: No positions
@Dayalal_Bhut @StonePitbull
Thanks for highlighting potential conflicts of interest of sponsors of this InvIT. This is helpful, especially the point that the two of the three assets acquired have major diversions. This is indeed a concern.
Yet, investing ₹750 crores into InvIT, after these transfers, is not insignificant to ignore. Maybe the discount below NAV the reason here? If we consider new assets, dilution, etc, the InvIT is roughly still at around 25% discount (please double check this).
i dont Think they’re going to pay more than ₹8 in near future. in previous concall they clearly indicate that the dpu may not increase in near future they trying to prolong the life of the invit from 14 to 17 years (I will not be surprised if DPU may dip slightly in the near future) and im curiuos how annual pass fasttag will affect thier collection in the near future
