IRB Infrastructure is looking to double the size of its recently-launched InvIT (Investment Infrastructure Trust) in the next three-four years, with the help of addition of one more road project to the existing six in the fund, the company said after declaring its fiscal first quarter financial results. IRB Infrastructure approved offering its Pathankot-Amritsar project for InvIT, in its board meeting held on Monday.
The offer for addition of the road project to the trust will be subject to regulatory approvals, IRB Infrastructure’s Chairman and Managing Director Virendra D Mhaiskar said. “If everything goes well, we expect to complete the transaction by the end of next quarter,” he said. Earlier May, IRB InvIT Trust became the first infrastructure investment trust to be listed on Indian exchanges.
It already has six toll-road projects — one each under a separate special purpose vehicle — namely IDAA Infrastructure Pvt Ltd, IRB Surat-Dahisar Tollway Private Ltd, IRB Talegaon Amravati Tollway Pvt Ltd, IRB Jaipur Deoli Tollway Pvt Ltd, IRB Tumkur Chitradurga Tollway Pvt Ltd and MVR Infrastructure and Tollways Pvt Ltd. The Board of directors on monday approved an offer for sale of company’s 100% equity stake in IRB Pathankot-Amritsar Toll Road Pvt Ltd to the IRB InvIT Fund. The anticipated increase in yield for InvIT shareholders would be around 75-100 basis points from around 11% at present.
This development comes after IRB Infrastructure’s earnings for the quarter ended June 2017 surprised on Monday, as the company’s net profit surged 31% year-on-year to Rs 238 crore, despite a steep rise in tax outflow. The reported profits trumped CNBC TV-18 analyst poll which had pegged the net profits at Rs 188 crore. The tax outflow to Rs 166 crore. This rise in the outflow was more than compensated by a rise in the other income.
The profitability was driven by the increase in turnover, to Rs 1,816 crore, a rise of nearly 20% when compared to the corresponding period in the last fiscal. The board of IRB Infrastructure Developers has declared an interim dividend of Rs 2.50 per equity share of face value of Rs 10 for the financial year 2017-18.
Only two companies, IRB Infrastructure Developers (IRB InvIT Fund) and Sterlite Power Grid Ventures’ (India Grid Trust) have floated their respective InvIT’s so far, even as several others have deferred their plans to launch investment infrastructure trusts. Reliance Infrastructure had plans to launch its InvIT in June, but it hasn’t seen the light of the day so far. In fact, Reliance Infrastructure had downsized its InvIT from Rs 5,000 crore to Rs 3,000 crore.