Construction work takes place on National Highway 1, in Amritsar, India,(Photographer: Pankaj Nangia/Bloomberg News)

IRB InvIT Sees Yield At 11-12% In FY18

IRB Infrastructure Investment Trust expects the yield for the current financial year to remain at 11-12 percent as it sees traffic growth on toll roads to remain in the range of 5-6 percent, Chief Financial Officer Tushar Kawedia told BloombergQuint.

“We believe in the current set of numbers, it is easily achievable,” he said.

IRB InvIT, country’s first infrastructure investment trust, reported a revenue of Rs 151 crore in the first quarter ended June. The board announced a dividend of Rs 1.55 per unit to shareholders. The return for 44 days from the date of listing translates into an annual payout of 12.6 percent.

For this quarter, we are distributing close to around Rs 90 crore, which is 94 percent of the total surplus.
Tushar Kawedia, Chief Financial Officer, IRB InvIT

An InvIT is a mutual-fund like investment option that can help unlock value and provide funding for infrastructure projects. IRB Infrastructure Developers Ltd., the sponsor of IRB InvIT, has transferred six of its toll road assets in Maharashtra, Gujarat, Rajasthan, Karnataka and Tamil Nadu to the InvIT. The trust is in the process of acquiring a seventh asset – Amritsar-Pathankot toll road – this financial year.

“We expect this acquisition to be completed in another two months,” Kawedia said. The Amritsar-Pathankot project has the potential to earn up to Rs 120 crore in revenue, Kewadia said.

IRB InvIT Fund made its market debut on May 18 after its initial public offering was subscribed more than 8.5 times.