 "IRB Infrastructure Developers")
IRB Infrastructure Developers
IRB Infrastructure Investment Trust (InVIT), a vehicle set up to manage road assets, is planning to raise Rs 2,667 crore through term loans to refinance existing debt. After the refinance transactions, its six Special Purpose Vehicles (SPVs) of InVIT will be free of any external debt. This will also elongate the duration of debt and reduce the cost of funds.
Its five operational toll assets/SPVs are managing road assets in states like Karnataka, Punjab, Rajasthan, and Maharashtra. In FY23, InVIT acquired VK1 Expressway Private Ltd, which has existing debt of Rs 955 crore at the SPV level and an acquisition finance loan of Rs 188 crore raised at the InVIT level.
The company did not respond to queries from Business Standard.
Rating agency India Ratings has assigned an “AAA/stable” rating for the proposed loan. The rating is supported by an elongation of the loan tenor and lower financing costs post the debt refinancing. For rating the new term loan, Ind-Ra has fully consolidated the cash flows of all six SPVs.
InVIT’s gross income rose by 2 per cent year-on-year (Y-o-Y) to Rs 275.2 crore in the first quarter ended June 2024 (Q1FY25) from Rs 268.7 crore in the quarter ended June 2023 (Q1FY24). However, its profit after tax (PAT) declined 15 per cent Y-o-Y to Rs 85.8 crore in Q1FY25 from Rs 100.6 crore in Q1FY24, according to the analyst presentation.
Ind-Ra said ratings are constrained by the moderate debt structure due to highly back-ended repayment. The risks associated with the toll road projects, including low traffic growth, traffic diversion, and alternate routes, also have a bearing on performance.
IRB InVIT is expected to maintain robust coverage metrics. With a moderate growth rate over the tenor of the debt, its debt service coverage ratio (DSCR) will be comfortable in the medium term.
The overall operational track record of the combined portfolio (around nine years) and highly fungible cash flows of the IRB InVIT structure bolster the overall credit profile, the rating agency added.
First Published: Sep 17 2024 | 6:50 PM IST
