IRB Infrastructure, the first InvIT to be listed

One of the leaders in road infrastructure, IRB Infrastructure Developers Ltd., will be raising Rs 5035 crore through an initial public offering of its infrastructure investment trust, IRB InvIT Fund.

An InvIT is a trust that owns and manages income-generating infrastructure projects. It allows public investors to directly invest in such projects, and returns a portion of the income to the investors.

Being the first Indian InvIT to be listed on the Exchanges, it will open on May 3, and close on May 5, and will have a price band of Rs 100 to Rs 102 per unit.

75% of the units to be sold in the offering are reserved for institutional buyers, with the remaining 25% for non-institutional investors such as high-net-worth individuals (HNIs).

The bid can be made for a minimum of 10,000 units, and in multiples of 5,000 units thereafter. The IPO will consist of a fresh issue, aggregating up to Re 4,300 crore, and an offer for sale of up to 34,761,770 units, by the unit holders.

IRB said it will use about Rs 3,300 crore of proceeds to repay underlying debt associated with the assets, and the balance to pay back sponsored debt.

The trust will have six completed road assets covering 3,000 km spread across five States, and an average balance concession period of 16 years, and it will have 100 percent ownership on those six assets.

The management has assumed a CAGR of 9.5 per cent for these assets.