Reliance Infrastructure (RInfra) has received final observation from Securities and Exchange Board of India (Sebi) to launch its Infrastructure Investment Trust (InvIT) Fund. The company plans to come out with the initial public offer (IPO) in early June.
With an issue size of Rs 2,500 crore, RInfra plans to hit the capital markets by June 10. "There is an option to retain over-subscription of up to 25% of the issue size," said a company spokesperson.
The proceeds from the issue will be utilised to reduce RInfra's debt. RInfra will be the third infrastructure company to come out with InvIT Fund; the first two being IRB Infrastructure Developers (IRB InvIT Fund) and Sterlite Power Grid Ventures (India Grid Trust).
The earlier plan of RInfra was to raise Rs 3,000 crore by listing 10 road projects. However, it later scaled down the InvIT offering to Rs 2,500 crore. Now, the InvIT Fund will have seven toll road assets. RInfra's road portfolio has a total of 11 assets.
The toll revenue from seven toll road assets is Rs 400 crore, with earnings before interest, tax, depreciation and amortisation (Ebitda) of 85%.
Reliance Nippon Life Asset Management Ltd is the investment manager to the InvIT. Axis Capital, DSP Merrill Lynch and UBS Securities are acting as global coordinators and book running lead managers. SBI Capital Markets and YES Securities are acting as book-running lead managers.
An InvIT is like a mutual fund instrument that offers an opportunity to promoters of projects to sell their stake in completed projects to the trust, which in turn can raise long-term and tax-free funds from unit holders.
ROAD GAINS
- The proceeds from the InvIT issue will be utilised to reduce Reliance Infrastructure’s debt
- IRB Infrastructure Developers and Sterlite Power Grid Ventures have already come up with InvITs
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The earlier plan of RInfra was to raise Rs 3,000 crore by listing 10 road projects. However, it later scaled down the InvIT offering to Rs 2,500 crore. Now, the InvIT Fund will have seven toll road assets. RInfra's road portfolio has a total of 11 assets.
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