Sebi approves InvIT application of Reliance Infra

The capital markets regulator on Friday, 25th Nov, approved the registration of the InvIT – infrastructure investment trust of Reliance Infrastructure Limited, the firm stated in a filing to the stock exchanges. On 20th September, a newspaper reported that Reliance Infra had applied to the Sebi – Securities and Exchange Board of India to register an InvIT for its toll road projects. The firm stated in the exchange filing that Reliance Infrastructure Limited was the Sponsor to the said InvIT Fund which would carry out the activities as an InvIT, subject to the conditions which were specified in the SEBI Act, 1992 and the Regulations made there under.

The planned InvIT will witness the company put its whole portfolio of road assets in the trust. A person aware of the development said that they were planning to put under the trust their entire toll road portfolio of 11 projects. He said that the company was in advanced stages of filing the DRHP – draft red herring prospectus. He further added that the DRHP would be filed very soon given that Sebi takes around 2 months to clear the document, one could expect them to launch the InvIT ahead of the end of the next quarter.

Earlier this week, the electronic media reported that investment banks Bank of America Merrill Lynch, UBS, Axis Capital and Yes Bank were working on the DRHP filing that is expected by end of November.

The person cited above said that R-Infra would be diluting at least 51 per cent stake in these projects. They were looking at a valuation of around Rs.9,500-10,000 cr for these assets, he added.

Reliance Infrastructure has invested Rs.9,000 cr in its 11 toll road projects spanning 1,000 km across 7 states. More than Rs.5,000 cr of this is debt. The company’s debt, not including its subsidiaries’, was about Rs.15,500 cr as on 31st March. Consolidated debt stood at Rs.25,000 cr in the same period. The application follows that of IRB Infrastructure Developers Limited, which on 9th September filed the DRHP for its InvIT with the Sebi to raise as much as Rs.4,300 cr.

Sterlite Power Grid, power transmission line developer, is also working to an Rs.2,000-2,500 cr InvIT for 3 of its transmission line assets, the media had reported in the month of July. In May this year, the Sebi released norms for public issue of units of InvITs (the final set of major rules which were awaited before companies could begin marketing their issues).

On Friday, Reliance Infra share price closed trading at Rs.458.45, up by around 2 per cent on the NSE.

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