Larsen & Toubro-sponsored IndInfravit Trust plans to raise about Rs 1,600 crore in a domestic bond sale as it seeks to fund the purchase of road assets from Sadbhav Infrastructure Project.
ICICI Bank and Kotak Mahindra Bank are arranging the sale, people with direct knowledge of the matter told ET. The proposed bond sale is expected to come up on the exchange bidding platform soon. The terms of the bonds are yet to be finalised.
The infrastructure investment trust (InvIT) is also backed by the Canada Pension Plan Investment Board (CPPIB).
Last year in July, IndInfravit Trust said that it was acquiring nine operational road assets from Sadbhav Infrastructure Project for Rs 6,610 crore. It held a portfolio of five operational toll road concessions then.
IndInfravit was supposed to acquire the assets through a mix of cash payment and units of the InvIT. After the completion of the transaction, Sadbhav would hold up to 10 per cent units in IndInfravit. Two weeks ago, rating company Crisil gave a provisional rating to IndInfravit Trust with triple-A/stable grade. The rating was for non-convertible debentures.
The rating reflects IndInfravit Trust’s robust debt protection metrics backed by good traffic potential of the stretches, and moderate proposed leverage of 47 per cent post acquisition of nine assets from Sadbhav Infrastructure Project, Crisil said in a note released on February 13.
The company’s strengths are partially offset by susceptibility of toll revenue to volatility in traffic volume, and to development or improvement of alternative routes or modes of transportation that could impact the DSCR (debt service coverage ratio).
The rating factored in the diversified portfolio of 14 assets with strong operational track record of five existing and nine proposed assets which are in the process of being acquired from SIPL.
Of the nine projects in the process of acquisition from SIPL, eight have received approval from their respective concessioning authorities, show the Crisil report. The approval from the Ahmedabad Urban Development Authority (AUDA) for the Ahmedabad Ring Road project is still pending.
Source: Economic Times