Indus Infra Trust reports a stronger quarter with new asset acquisitions, a ₹2,000 crore capital raise, and maintaining steady distributions, as it navigates increasing competition in the road asset market.
Indus Infra Trust ended the quarter with a stronger portfolio and a larger balance sheet after completing the purchase of three special purpose vehicles, a move that management said should broaden cash flows and extend the trust’s income profile. The acquisitions of KNR Palani, KNR Ramagiri and ULCCS Kasaragod Expressway also helped the trust push ahead with its plan to deepen its road asset base, even as competition for quality assets intensifies. GuruFocus reported that the trust coupled those deals with a ₹2,000 crore fundraising, split between a qualified institutional placement and preferential allotment at ₹119 per unit.
The trust also kept its payout steady, declaring a distribution per unit of ₹3.55 for the quarter and lifting cumulative distributions to ₹31.25 per unit. Management reiterated guidance for about ₹14 per unit for the full year, saying the enlarged capital base supports the forecast. In the earnings-call highlights published by GuruFocus, the trust said its operational hybrid annuity model assets continued to perform predictably, with annuities arriving on schedule and no material deviations.
Amit Kumar Singh, the chief executive, said the trust’s net asset value was expected to stand at around ₹118 as of June 30 after the latest distribution cycle and the fundraise. He said the ULCCS asset was bought from Uralungal Labour Contract Co-operative Society at an equity internal rate of return of 13.5% to 14%. Singh also said the acquisitions were funded through equity rather than fresh debt, while refinancing at the special purpose vehicle level carried borrowing costs of about 7.15% to 7.20%.
The quarter was not without strain. GuruFocus reported an impairment charge of ₹38.995 crore, reflecting a gap between fair value and book value, while total external borrowings rose to ₹5,623 crore from ₹3,688 crore in the previous quarter. Finance costs climbed to ₹72.17 crore from ₹42.47 crore, and overall expenses increased to ₹162.31 crore from ₹105 crore, largely because of higher interest expense and operating and maintenance costs tied to the newly added entities.
Singh acknowledged that the road-asset market has become more crowded as new infrastructure investment trusts enter the field, which may put pressure on returns and make high-quality acquisitions harder to secure at attractive valuations. He said the trust is watching maintenance risk closely and relies on detailed due diligence, fixed-price operating contracts, insurance and active maintenance management to reduce surprises. The company is targeting 5 to 6 more right-of-first-offer acquisitions this financial year and said the combined enterprise value of that pipeline is about ₹5,200 crore, with a mix of roughly ₹3,200 crore of debt and ₹2,000 crore of equity, although more equity may be needed depending on timing and internal cash generation.
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