India’s IRB Infra to raise $650m

The listing would be the first by an investment trust on the Indian stock exchange since the government revamped regulations in 2014.

IRB Infrastructure Developers is preparing to list its infrastructure investment trust in a bid to raise up to 43 billion rupees ($645 million; €572 million).

The road developer has already registered IRB InvIT Fund, as the trust is dubbed, with the Securities and Exchange Board of India. The trust will sell new shares through the IPO, while IRB and four of its subsidiaries, namely Modern Road Makers, Aryan Toll Road, ATR Infrastructure and Ideal Road Builders, will also divest existing shares, according to a stock exchange filing.

This is the first trust to be listed on the Indian stock exchange since the InvIT regulations were revised in 2014. InvITs are trusts which manage income-generating infrastructure assets, a product created to help cash-strapped developers get easier access to funds while offering stable yields to investors, including institutions and high net worth individuals.

The 2014 rules provided the regulatory framework to set up and list these instruments but it was not until May 2016 that the SEBI released the final set of rules allowing companies to kickstart marketing campaigns for their trusts.

IRB Infrastructure Developers is the infrastructure investment arm of IRB Group. Its company website stated that it has constructed, operated and maintained around 9,295 lane-km of road so far, with the aggregate size of all its BOT projects standing at around 285 billion rupees.

Earlier in July, IRB said it was awarded a road concession worth 21 billion rupees from the National Highway Authority of India for a six-lane project on a section of the NH-8.

In addition to IRB, infrastructure companies including IL&FS, Sterlite Power Grid Ventures, GMR Infrastructure and MEP Infrastructure Developers are reportedly looking to raise funds by listing their own InvITs, though they have not filed offering documents yet.