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Sebi approves InvIT application of Reliance Infra

The capital markets regulator on Friday, 25th Nov, approved the


registration of the InvIT - infrastructure investment trust of
Reliance Infrastructure Limited, the firm stated in a filing to the
stock exchanges. On 20th September, a newspaper reported
that Reliance Infra had applied to the Sebi - Securities and
Exchange Board of India to register an InvIT for its toll road
projects. The firm stated in the exchange filing that Reliance
Infrastructure Limited was the Sponsor to the said InvIT Fund
which would carry out the activities as an InvIT, subject to the
conditions which were specified in the SEBI Act, 1992 and the
Regulations made there under.
The planned InvIT will witness the company put its whole portfolio of road assets in the
trust. A person aware of the development said that they were planning to put under the trust
their entire toll road portfolio of 11 projects. He said that the company was in advanced
stages of filing the DRHP - draft red herring prospectus. He further added that the DRHP
would be filed very soon given that Sebi takes around 2 months to clear the document, one
could expect them to launch the InvIT ahead of the end of the next quarter.
Earlier this week, the electronic media reported that investment banks Bank of America
Merrill Lynch, UBS, Axis Capital and Yes Bank were working on the DRHP filing that is
expected by end of November.
The person cited above said that R-Infra would be diluting at least 51 per cent stake in these
projects. They were looking at a valuation of around Rs.9,500-10,000 cr for these assets, he
added.
Reliance Infrastructure has invested Rs.9,000 cr in its 11 toll road projects spanning 1,000
km across 7 states. More than Rs.5,000 cr of this is debt. The companys debt, not including
its subsidiaries, was about Rs.15,500 cr as on 31st March. Consolidated debt stood at
Rs.25,000 cr in the same period. The application follows that of IRB Infrastructure
Developers Limited, which on 9th September filed the DRHP for its InvIT with the Sebi to
raise as much as Rs.4,300 cr.
Sterlite Power Grid, power transmission line developer, is also working to an Rs.2,000-2,500
cr InvIT for 3 of its transmission line assets, the media had reported in the month of July. In

May this year, the Sebi released norms for public issue of units of InvITs (the final set of
major rules which were awaited before companies could begin marketing their issues).
On Friday, Reliance Infra share price closed trading at Rs.458.45, up by around 2 per cent on
the NSE.

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Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

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Article Written by
Salman Hashmi