IRB Infrastructure files DRHP with SEBI for InvIT fund
IRB Infrastructure Developers, one of the leading construction and infrastructure companies has filed a draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for an infrastructure investment trust fund. It is the first company which has filed the DRHP to raise as much as Rs.4,300 crore. As a result of this, the shares of the company rose as much as 9.8% after the announcement.
A liquid method of investing in infrastructure projects is offered by the InvITs to the investors. They are basically the trusts that manage income-generating infrastructure assets. The long-term funds raised from unit-holders can help developers unlock value in their completed projects or repay debt associated with them.
The Indian companies were allowed to launch real estate investment trusts and InvITs by SEBI in the year 2014. It was done to provide the insolvent developers an easy access to funds and create a new investment avenue for institutions and high networth individuals. The norms for the public issue of units of InvITs were released by SEBI in May that year. It was the final set of fundamental rules that were pre-requisite before firms could start marketing their issues.
According to Santosh Yellapu, an analyst at Angel Broking Pvt. Ltd, a lot of excitement will be generated among the institutional investors due to IRB’s InvIT. “Success of an InvIT will be highly dependent on what kind of yield the assets will be giving to the investors, and that yield in turn is dependent on the kind of assets being put under the portfolio. IRB has put its better quality road projects in the portfolio, which have strong operational track record and traffic growth of over 8%,” he said.
Talking about the draft, IRB Infrastructure Group stated that, “The initial public offer consists of a fresh issue of units, aggregating up to Rs.43,000 million, by the trust, and an offer for sale of units by the company and certain of its subsidiaries, namely Modern Road Makers Pvt. Ltd, Aryan Toll Road Pvt. Ltd, ATR Infrastructure Pvt. Ltd and Ideal Road Builders Pvt Ltd.”
The filing of DRHP by IRB Infrastructure Developers will prove to be a great move for the company. It is likely to bring in cheer for the company.