IndInfravit Trust, the infrastructure investment trust of L&T Infrastructure Developers (L&T IDPL) — a subsidiary of Larsen & Toubro (L&T) — is in the process of raising Rs 3,000 crore. While L&T IDPL will infuse Rs 1,500 crore as equity, another Rs 1,500 crore will be raised via a private placement. The total enterprise value of the Trust is pegged at Rs 6,000 crore after the fundraising. The company expects to conclude the fundraising process in about a week’s time, a person aware of the development told FE. A company’s spokesperson declined to comment.
Separately, ratings agency Icra, on Monday, assigned an issuer rating of AAA with a stable outlook to the proposed IndInfravit Trust. Icra said the rating does not reflect the ability of IndInfravit to meet dividend payouts to unit investors, or the ability of the five individual special purpose vehicles (SPVs) held by the trust to service their debt obligations.
All the five SPVs have operational toll road projects undertaken on a public, private, partnership (PPP) basis with concession agreements with the National Highways Authority of India (NHAI). These projects have an operational track record with two projects being operational for nine years while three other projects have an average track record of around four years.
The agency said the Trust will benefit from its moderate leverage and healthy cash flows in the SPVs. The consolidated external debt across the five SPVs stood at around Rs 3,400 crore as on December 31, 2017, which is expected to reduce by 62% post repayment of the debt by the Trust.
Icra said the significant reduction in external debt would result in a considerable improvement in the consolidated debt coverage indicators. Further, the funds infused by the Trust into the underlying SPVs as debt would remain subordinated at all times to the external debt, thereby, providing greater comfort to the external debt holders.