The first four infrastructure investment trusts (InvITs), which are likely to hit the primary markets this financial year, can reduce the overall debt of the sponsor groups by close to Rs 13,000 crores, says a report.
Stating that InvIT fund listing can provide cash-flow relief to the cash-starved sector, India Rating in a report, said that the companies that are likely to deleverage, by using the InvIT route this year, are Sterlite Power Grid Ventures, Rinfra and IL&FS Transportation Networks. IRB Infra has already closed an IPO of over Rs 5,000 crores.
See also: M&A and InvITs to account 12% of total infrastructure fund requirement
“These four companies, through the public floats of their InvITs, can deleverage their balance sheets and refinance the remaining debt to the tune of Rs 3,600 crores, out of their total debt of Rs 13,000 crores, at lower costs,” India Rating said in a note. Deleveraging will provide a fillip to the coverage metrics of SPVs housed under the InvIT structures and refinancing and will further improve the credit profile of InvITs, the report added.
The agency expects IRB to deleverage up to 77.5 per cent of its Rs 3,513 crore debt (as of December 2016) on its operational toll road projects post-IPO, resulting in robust coverage metrics and favourable gearing. India Grid Trust (IndiGrid) is planning to hive off Sterlite Grid1 under its InvIT trust. SGL1 holds two operating transmission assets – Bhopal-Dhule Transmission Company and Jabalpur Transmission Company – which are the IPO assets. Post-IPO which is opening soon, it is likely to hold 15-25 per cent of IndiGrid.
Press Trust of India (PTI), headquartered in New Delhi, is India’s largest news agency. It was registered in 1947 and started operations in 1949. PTI has more than 400 journalists and 500 stringers, who generate more than 2,000 stories and 200 photographs every day. Subscribers to PTI’s feed include the mainstream media, research groups, specialised presses, companies, government organisations and NGOs.
Facebook: https://www.facebook.com/PressTrustofIndia
Twitter: https://twitter.com/PTI_News
Email: [email protected]
Related Posts
IRB targets Rs 5,000 crores from its maiden InvIT IPO on May 3, 2017.
SEBI to allow REITs and InvITs to take off this year.
Three companies get SEBI nod to launch InvITs.
SEBI permits mutual funds to invest in REITs and InvITs.
Total PE into Indian real estate in 2016 vastly exceeds 2015 inflows.
India’s present REIT potential: 294 million sq ft of office space.
