Mumbai: The capital markets regulator on Friday approved the registration of the infrastructure investment trust (InvIT) of Reliance Infrastructure Ltd, the firm said in a filing to stock exchanges.
On 20 September, Mint reported that R-Infra had applied to the Securities and Exchange Board of India (Sebi) to register an InvIT for its toll road projects.
“Reliance Infrastructure Limited is the Sponsor to the said InvIT Fund which will carry out the activities as an InvIT, subject to the conditions specified in the SEBI Act, 1992 and the Regulations made there under,” the firm said in the exchange filing.
The planned InvIT will see the company put its entire portfolio of road assets in the trust. “They plan to put under the trust their entire toll road portfolio of 11 projects,” said a person aware of the development, requesting anonymity as the talks are private.
The company is in advanced stages of filing the draft red herring prospectus (DRHP), he said. “The DRHP will be filed very soon. Given that Sebi takes around two months to clear the document, you could expect them to launch the InvIT before the end of the next quarter,” he said.
Earlier this week, TV channel ET Now reported that investment banks Bank of America Merrill Lynch, Axis Capital, UBS and Yes Bank were working on the DRHP filing, which is expected by end of November.
A spokesperson for R-Infra declined to comment on details of the infrastructure trust.
“R-Infra will be diluting at least 51% stake in these projects. They are looking at a valuation of around Rs9,500-10,000 crore for these assets,” said the person cited above.
Reliance Infrastructure has invested Rs9,000 crore in its 11 toll road projects spanning 1,000km across seven states. More than Rs5,000 crore of this is debt. The company’s debt, excluding its subsidiaries’, was about Rs15,500 crore as on 31 March. Consolidated debt stood at Rs25,000 crore in the same period.
The application follows that of IRB Infrastructure Developers Ltd, which on 9 September filed the DRHP for its InvIT with Sebi to raise as much as Rs4,300 crore.
Power transmission line developer Sterlite Power Grid is also working to an Rs2,000-2,500 crore InvIT for three of its transmission line assets, Mint had reported in July.
In 2014, Sebi allowed Indian firms to launch real estate investment trusts and InvITs to help cash-strapped developers get easier access to funds while also creating a new investment avenue for institutions and high net-worth individuals.
In May this year, Sebi released norms for the public issue of units of InvITs—the final set of major rules that were awaited before firms could start marketing their issues.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.