Anil Ambani Group flagship Reliance Infrastructure has filed revised papers with markets watchdog Sebi for its proposed InvIT Fund IPO, scaling down the issue size to Rs 2,500 crore from Rs 3,000 crore earlier. Sources said RInfra filed the revised offer document or draft red herring prospectus (DRHP) after it could get NHAI permission for only seven of its 11 road assets to the fund as the remaining four are yet to complete two years of commissioning. It had planned to take 10 of the 11 completed assets in the first draft papers filed last December.
Accordingly, sources told PTI, that RInfra InvIT fund will initially own seven toll road assets that connect major cities. The initial road assets extend 1,756 lane km across three states with concession periods of 9-20 years.
Sources said RInfra has an option to retain 25 per cent of the oversubscription of the InvIT (infrastructure investment) Fund and the issue will hit the market in the first quarter of the current financial year.
The infrastructure investment fund or InvIT are those debt instruments which be traded in the market and can act as investment vehicles for the sponsors. Listing of instruments enable promoters to monetise completed assets and raise funds for other long-term projects and can raise long-term, tax-free funds from the market.
For Rinfra, the InvIT is a strategy to divest stakes in road assets and focus more on cash contracts than development projects that require equity investment. Infra developer like IRB (which went public with its InvIT last week), GMR, IL&FS among others are keen to launch InvIT funds to raise capital in improve their liquidity.
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Sources said post-IPO, consolidated debt of the company will come down by Rs 3,200-4,000 crore and that toll revenue from the seven assigned toll road assets is around Rs 400 crore, with an Ebitda of 85 per cent.
While RInfra will be the project manager of InvIT Fund Reliance Nippon Life AMC will be its investment manager.
RInfra InvIT Fund will also have right of first refusal to acquire further four operating toll road assets over the next 12-24 months for which it has the necessary approvals from NHA to transfer 100 per cent equity interests to RInfra InvIT Fund.
Last December RInfra became one of the first to file for an InvIT IPO with the Sebi for Rs 3,000-crore.
Last month the company had received National Highways Authority’s consent for the fund, making it the first road developer to get the approval, and clearing the way for it to hit the capital market.
It can be noted that on April 25, IRB hit the market with a Rs 5,035-crore InvIT IPO, making it the maiden IPO from such an instrument opening for subscription tomorrow and closes on May 5. IRV has set Rs 100-102 per unit price band.
IRB’s InvIT fund expects to raise Rs 5,035 crore comprising fresh issue of units aggregating to Rs 4,300 crore and an offer-for-sale of nearly 3.48 crore units by IRB Infra Developers and its arms–Modern Road Makers, Aryan Toll Road, ATR Infra and Ideal Road Builders.