India’s first InvIT offer captures a strong response

India’s first infrastructure investment trust (InvIT) offering generated an engaging response in the market, as IRB Developers introduced a new capital raising window for infrastructure and real estate entities.
 
Raising bids worth about Rs 22,000 crore, IRB InvIT Fund’s Rs 5,000 crore initial public offering (IPO) attracted eight times more demand than the units on offer. The IPO also generated a strong demand among foreign investors.    
 
The institutional fraction of the offering witnessed 11 times subscription with a major number of bids being sourced from foreign institutional investors, whereas, the institutional fraction of the offering witnessed 6 times subscription. In addition, High net worth individuals (HNIs) also made aggressive bids for the offering.
 
The significantly higher yield from InvIT in comparison to bonds have largely generated its demand among FIIs and there are speculations abuzz that Sterlite Power Grid and Reliance Infrastructure will also launch InvIT soon.   
  
The price band for IRB InvIT Fund was set to stay between Rs 100 and 102 per unit and the IPO allowed investors to apply either for a minimum 10,000 units or in multiples of 5,000 units.

The IRB InvIT trust has six operational road assets and the company is planning to utilise the IPO proceeds for debt repayment of its special purpose vehicles (SPVs) created for toll-road projects.