IRBINVIT — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

IRB InvIT Fund

Transcript of 5th Annual General Meeting (AGM) of IRB InvIT Fund (“Trust”) held on June

27, 2022 at 11.00 am through Video Conferencing (“VC”)

Welcome address by the Chairman

Good Morning to all the Unitholders, I welcome all of you to the 5th Annual General Meeting of IRB

InvIT Fund held through Video Conferencing in compliance with the applicable provisions of the SEBI

(InvIT) Regulations.

I now introduce my colleagues on the Board of Investment Manager, who are present with me through

this video conference.

Vinod Menon, Whole-time Director and CEO, Mr.

Independent Director, Mr.

Nikesh Jain, Independent Director and Mr.

Rushabh Gandhi, CFO.

We have also requested Mr.

Virendra Mhaiskar, Sponsor’s Representative & CMD of IRB

Infrastructure Developers Limited and Mr.

Anil Yadav, Director - Investor relation to be present in the

The Trust has enabled the unitholders to participate at the 5th AGM of the Trust through the video

conferencing facility provided by KFinTech.- Registrar.

The proceedings of the AGM are also being

web-casted live for all the Unitholders.

Since requisite quorum is present, I declared the meeting is in

order and commence the proceedings of the meeting.

The Notice and auditor report along with the

Audited Accounts are with the permission of the Unitholders, considered as read.

On behalf of the Board of Directors of Investment Manager, it gives me great pleasure to share the

performance highlights of IRB InvIT Fund (“the Trust”) for FY 2021-22.

Financial Year 2021-22 witnessed the 2nd and 3rd waves of COVID-19 pandemic resulting in partial

lockdown which restricted business activity across all projects.

In addition to this, farmers’ agitation

hampered the operations of our project in Punjab for nearly nine months.

Despite the above challenges,

your Trust was able to distribute Rs. 9.00 per unit for FY 2021-22, aggregating a total distribution of

Rs. 50.30 per unit since listing in May 2017.

On completion of the respective concession periods, the Bharuch-Surat BOT Project was handed over

to NHAI at the end of FY 2021-22 and Surat-Dahisar BOT Project was handed over to NHAI in May

During the year, we have re-financed a significant part of the external debt of the Trust resulting

in interest savings of 0.35% p.a.

Your Trust continues to enjoy AAA ratings for its debt.

In the last few months, we have seen a good recovery in traffic.

Our toll collection through FASTag or

ETC has reached more than 95%, resulting in further efficiency and transparency.

Backed by a resurgent

economy and sharp tariff rate revision of 10.2% from April 2022 in four of our assets, we expect healthy

growth in revenue for these projects.

We are actively engaged in evaluation of potential acquisition opportunities.

We have received a preliminary non-binding proposal the Sponsor of the Trust.

It relates to a potential

acquisition opportunity of a Hybrid Annuity Project namely Vadodara Kim Expressway Project.

Project is an 8-lane expressway and a part of Delhi Mumbai Expressway corridor.

It has received a

provisional completion certificate and it’s a revenue generating operational asset.

implemented this Project with project cost of Rs 2,094 crores.

The Investment Manager is currently

evaluating the Proposal.

We will reach out to our esteemed unitholders after due diligence and full

To conclude, I once again express my sincere gratitude to all the unitholders for continued faith in the

Trust and the valuable support and guidance from time to time.

I now request the Company Secretary to brief the members regarding the arrangements made for the

Company Secretary

The Unitholders are provided a facility to exercise their right to vote by electronic means, both through

remote e-voting and e-voting at the AGM as per SEBI circulars.

The Unitholders joining the meeting

through video conferencing, who have not already cast their vote by means of remote e-voting, may

vote through insta-poll e-voting facility provided at the AGM.

Mihen Halani & Associates, Practicing

Company Secretaries are appointed as the Scrutinizer.

With a permission of the Chairman Sir, Insta-poll is active now and same will be disabled 15 minutes

after the termination of the AGM.

The result of the evoting and insta-poll will be announced by June

With a permission of the Chairman Sir, I request the Moderator to open the Q&A session.

In the interest

of time, we will aggregate the questions/ comments first from all speakers and reply them together.

Question and Answer

Some Unitholders have raised few questions/queries which were answered by the CFO.

the summary of Q&A.

What is overall Traffic Growth in all projects and tariff revision for FY22?

Reply: Last two years were impacted due to various waves of Covid -19 pandemic.

this, we have observed resilient recovery in traffic in the recent months.

Four of our projects i.e.

TC, JD, PA and TA have got a tariff revision of ~ 10.2% applicable from 1st April 2022.

MVR, rate revision is expected to be ~ 14% effective from 1st September 2022 onwards.

Can you brief about arbitration award of IRB Pathankot and status of claim raised by IRB

Pathankot for stoppage of toll collection due to Farmer Agitation?

Reply: We had received favorable arbitration award for Amritsar Pathankot Project against

National Highways Authority of India (“NHAI”) from the Hon’ble Arbitration Tribunal for

extension of the Concession Period by 518 days and compensation of Rs. 252.25 crores plus

interest, incurred during the extended period for delay in completion of construction of the project

on account of the reasons not attributable to IPATRL.

The petition filed by NHAI challenging the Arbitral Award, was dismissed by the Honorable

Delhi High Court & the Arbitral Award has been upheld.

The Company has recently received

Rs. 309 crs against bank guarantee provided by the EPC contractor.

The Company has

appropriated Rs. 308 Crore towards the part payment of claims of the EPC Contractor while the

SPV will be benefitted with 518 days extension in concession period.

Since Surat-Dahisar and Bharuch-Surat Highway Projects handed over, whether the Trust will

able to pay same amount as distribution similar to previous year?

Reply: The Trust has successfully handed over the Bharuch Surat and Surat Dahisar project to

the Authority in March and May, 22 respectively.

The toll revenue is expected to reduce on

account of completion of BS and SD project.

However, there would also be corresponding

reduction in O&M costs.

What is the revised O&M cost for FY23 post handing over Surat-Dahisar and Bharuch-Surat

Reply: The Trust has entered into fixed price O&M contract for a period upto year 2030 with the

Project Manager.

The O&M cost for FY23 is expected to be Rs. 100 crores.

What was the NAV of Trust as on 31st March 2022?

Reply: The NAV as per Independent valuer report as on 31st March 2022 was Rs. 101.08 per

What is status of acquisition of new asset as InvIT has received non-binding proposal from the

Reply: As explained by our Chairman, the Trust has received non-binding proposal from the

Sponsor for Vadodara Kim project.

The Investment manager is currently evaluating the project.

Post receipt of binding proposal, the Board of Investment Manager, if deemed fit, will put up for

the Unitholders’ approval.

What is the rating assigned to the trust?

Whether the proposed acquisition of VK1 project will

impact the rating?

Reply: The Trust has been assigned AAA rating by Care ratings and India Ratings.

In case of HAM assets, the receivables are from NHAI (AAA rated).

also expected to be AAA rated post receipt of 1st Annuity.

Considering this, we do not foresee

any impact on the rating of trust in case the project is acquired.

Then the Chairman requested Mr.

Virendra Mhaiskar, CMD & Representative of Sponsor to brief about

non-binding offer regarding acquisition of Vadodara Kim Expressway Project.

Sponsor’s representative - Mr.

Virendra Mhaiskar

Good morning to all of you.

I am really happy to see this fund has reached its fifth milestone since

Since listing the Trust has distributed ~Rs. 50.30 per unit which is almost half of the listing

price per unit.

Till date total payout is Rs. 2,920 crores over the period of little less than 5 years.

to congratulate the management team for such a handsome distribution to the unitholders in the last 5

Sponsor has offered non-binding proposal for one of its HAM project i.e.

expressway Project which is part of prestigious Mumbai-Delhi Expressway.

Now, Sponsor and InvIT

management is in process of approaching potential shareholders/unitholders for this acquisition of

project and discussing with them about their thought process and how they would like the portfolio to

After completion of the same and once Sponsor’s Board will approve, we will approach InvIT

management with formal proposal for acquisition of Vadodara Kim expressway Project.

very good addition to the Public InvIT portfolio as this would be a HAM project getting added.

project will give steady flow of revenue because same has been guaranteed by NHAI (AAA rated

The asset is also expected to be AAA rated.

Considering this, we do not foresee any impact on

the dilution of rating of the Trust in case the project is acquired.

Now, I propose a vote of thanks to the Directors, the Sponsor, the Trustee and above all, the Unitholders