IRB InvIT Fund, which is sponsored by engineering company IRB Infrastructure Developers, is seeking to raise about Rs 4,300 crore in an initial public offering (IPO) next week, kicking off the first-ever listing of an infrastructure investment trust in the country. The IPO will have a price band of Rs 100-102 per unit. The issue, which opens on May 3 and closes on May 5, also has an offer for sale of up to 3.47 crore units.
Overall, the trust will be raising around Rs 5,035 crore as part of this first public offering, which includes fresh issue of Rs 4,300 crore, offer for sale and over subscription.
The bids can be made for a minimum of 10,000 units and in multiples of 5,000 units thereafter.
Minimum application size for bidders other than anchor investors and strategic investors bidding in the anchor investor portion is Rs 10 lakh. Anchor allotment will be on May 2, a day before the issue opens.
Speaking at the IPO media conference, Virendra D Mhaiskar, chairman and MD of IRB Infrastructure Developers, said the majority of the money amounting to Rs 3,350 crore would be utilised to repay the external debt of the underlying SPVs and the balance Rs 1,700 crore would be utilised to pay back the sponsor – IRB’s sub debt and equity.
At an enterprise value of about Rs 5,922 crore, IRB as a sponsor would be holding around Rs 900 crore worth of units, which is 15% of the enterprise value. There are six project entities proposed to form part of the initial portfolio of the Trust.
“All the six projects have proven track record and have been operational for good number of years and have demonstrated significant CAGR of 11.4% since they became operational,” Mhaiskar said.
The issue is being made through the book building process and in compliance with the InvIT regulations, wherein not more than 75% of the issue shall be available for allocation on a proportionate basis to institutional bidders.
Further, not less than 25% of the issue shall be available for allocation on a proportionate basis to other bidders, in accordance with the InvIT regulations.
IRB Infrastructure, which is the investment manager, reserves the option to retain oversubscription of up to 25% of the issue size in accordance with the InvIT regulations. The issue will constitute at least 25% of the total outstanding units on a post-issue basis.
IDFC Bank and Credit Suisse are global coordinators to the issue and ICICI Securities and IIFL are the book running lead managers.