The launch, which was earlier slated for June 2017, is likely to happen in Q2; but experts stay sceptical
Reliance Infrastructure (RInfra) plans to come out with its maiden infrastructure investment trust (InvIT), which has seen some delay, during the second quarter of this fiscal.
The InvIT launch was earlier slated for June this year.
"We plan to launch our InvIT for road portfolio in this quarter," said Lalit Jalan, chief executive officer of RInfra while announcing first quarter results on Wednesday.
However, there are concerns that the InvIT may get further delayed.
An analyst DNA Money spoke to said that the Anil Ambani-promoted company might not be able to launch the InvIT during the quarter because of subdued response from investors as well as cash flow visibility from assets combined with the overall market condition in the recent past.
As per the initial plans, RInfra was to launch its InvIT during the first fortnight of June but had to defer it. On the reason for the delay in launching the InvIT for the seven of its 11 road projects, Jalan indicated that subscription response was positive but the listing response wasn't. The company wants the overall sentiment towards InvITs to stabilise before it launches its much-awaited product.
At present, there are only two listed InvITs one for road by IRB Infrastructure Developers and the other for power by Sterlite Power Grid Ventures.
RInfra also plans to offer the other four road projects to the proposed InvIT by the end of 2019, thus bringing the entire road portfolio under the new entity.
RInfra's consolidated net profit fell to Rs 334.17 crore from Rs 438.80 during the corresponding quarter last year. However, total income from operations increased from Rs 7,711.71 crore to Rs 8,085.50 crore during the same period. During the June quarter, income from engineering, procurement and construction and contracts went down from Rs 719.32 crore in Q1FY17 to Rs 525.67 crore.
Of the 11 road projects, RInfra has won arbitration award for two of them, while five other projects are under arbitration. The total valuation of arbitration award is around Rs 5,000 crore.
The company is also looking to monetize its assets that it has built and get back money to pay to the shareholders.
...& ANALYSIS
- RInfra indicated delay was caused as the listing response was not positive
- It wants the overall sentiment towards InvITs to stabilise before it launches the product
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RInfra also plans to offer the other four road projects to the proposed InvIT by the end of 2019, thus bringing the entire road portfolio under the new entity.
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