Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar. Thank you, and over to you, sir.
Thank you, Hamsha. Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q1 FY 2026 earnings call of Capital Infra Trust. Today, we have with us from the management, Mr. Manish Satnaliwala, CEO, and Mr. Amit Kumar, CFO. We will start the call with brief opening remarks, which will be followed by Q&A. Over to you, sir.
Thank you, Mohit. Good afternoon, everyone, and thank you for joining us on the Q1 FY 2026 earnings call of Capital Infra Trust. It is a festive time for next one week, and I take a moment to wish you all a very happy Raksha Bandhan and Happy Independence Day in advance. We have had a steady and encouraging start to FY 2026 Q1. Our operational assets continue to deliver consistent annuity cash flows across the portfolio. We currently manage approximately 650 km of annuity growth, with an average residual life of 11.3 years, providing visibility on cash flows. Our vision statement is clear: to deliver consistent and superior gains for our investors by combining expert asset management with innovative structuring, prioritizing transparency, disciplined risk management, and long-term value creation.
This is encapsulated in our Vision 3G framework: growth, governance, goal, guiding our roadmap to $5 billion AUM by 2030. Our distribution for Q1 FY 2026 stands at INR 3.61 per unit, comprising of INR 2.61 interim distribution and INR 1 per unit declared this month. This keeps us well on track to meet our full year FY 2026 distribution guidance of INR 14.61 per unit, translating to a 14.75% yield on issue price. Since inception, we have returned INR 26.50 per unit to our unit holders, excluding the recent distribution declared. In terms of industry and regulatory updates, we are encouraged by the renewed momentum in India's infrastructure sector.
The NHAI is set to build out 124 highway and expressway projects in FY 2026, covering approximately 6,376 km, surpassing the peak of FY 2023, with an estimated outlay of INR 3.45 lakh crore. Notably, 80 of these are under HAM, which aligns closely with our core investment strategy. This renewed activity is further supported by the National Infrastructure Pipeline, NIP, and PM GatiShakti Yojana, which continue to anchor large-scale capital deployment across roads, ports, logistics with annual infrastructure CapEx target exceeding INR 10 to INR 11 lakh crore, or 3% to 3.4% of GDP. In addition, the monetary policy during the quarter had a bank rate cut by 75 basis points with a neutral stance. The RBI had maintained a similar stance in its MPC meeting held a couple of days before.
While lower bank rates may reduce interest income for InvITs, the impact is meaningfully offset by the benefit of reduced debt servicing costs, ultimately enhancing cash flow efficiency and supporting additive growth. In terms of SEBI updated Unit regulation, it brings meaningful enhancement to support stable returns and prudent risk management. At least 80% of the asset must be invested in completed and revenue-generating assets, reinforcing long-term cash flow stability. The new framework also permits InvITs to deploy surplus cash in select liquid funds, improving short-term liquidity while maintaining a low-risk profile. Additionally, InvITs can now hedge interest rate exposures through derivatives such as swaps, futures, and FRAs, an important tool to manage financing and floating rate debt risk in a dynamic rate environment. In terms of key operational highlights, six projects are fully completed and have received their COD.
Remaining three projects, which were under construction, they have applied for the completion certificate during the quarter. All nine assets have maintained satisfactory conditions, reflecting commitment to our road quality standards. Routine maintenance was consistently implemented across sites. Riding quality remains stable and satisfactory throughout, highlighting our commitment to operational excellence and long-term asset value. In terms of growth, which is the main part, I am pleased to say that we have received a ROFO notice from sponsor, and our board has authorized to start the due diligence and evaluation to adding three new assets from the sponsor to our portfolio in FY 2026. These three assets are JRR Highways Private Limited, which is located in the state of Rajasthan. The second is Hasanpur Bakhtiyarpur Highway Private Limited, located in Bihar, and the third is Korba Highway Private Limited, located in Chhattisgarh.
All three assets are fully operational, backed by NHAI annuity payments, and will be acquired with 100% unit ownership. Together, they are expected to add INR 2,500 to INR 3,000 crore to our AUM. We remain focused on scaling prudently, targeting high-quality operational HAM assets while maintaining a prudent 80 to 20 mix between HAM and BOT road exposure. In closing, our strategy remains anchored in asset quality, predictable cash flows, and disciplined growth. We have provided a DPU guidance of INR 14.61 per unit and are confident of achieving it. With a robust pipeline, we are targeting over INR 2,500 crore of AUM addition in FY 2026 compared to the current AUM of INR 4,185 crore, representing a growth of around 60% and remain focused on our long-term vision of reaching $5 billion in AUM by 2030.
We are optimistic about the road sector and committed to delivering sustained value to our stakeholders. Thank you. Now I would like to hand over to Mr. Amit Kumar, our CFO.
Thank you, Manish. Good afternoon, everyone. I will take you through the key quarterly financials update for the trust. Starting with the AUM, we have concluded the Q1 FY 2026 with a strong AUM of INR 4,185 crores. Post-listing, we had issued NCDs totaling to INR 2,363 crores at competitive cost of debt of approximately 7.68% per annum, which are payable half-yearly. There is no change in the total debt since then. Trust continued to be rated AAA by two rating agencies, that is Crisil and CARE, for the entire debt. We are on slide 17. For the period under consideration, the total distribution per unit for the quarter works out to INR 3.61 per unit. Out of which INR 2.61 per unit was distributed as interim distribution in June 2025, and remaining INR 1 per unit will be distributed now.
The proposed INR 1 distribution will be in the form of repayment of debt and will be tax-free in the hands of investors. We are on slide 16. On consolidated basis, total income works out to INR 206 crores, with net loss of INR 73 crores as compared to total income of INR 159 crores and loss of INR 37 crores in last quarter. Since trust got listed in the month of January 2025, only comparatives for Q1 FY 2025 are not available. The net loss booked in the current quarter is mainly due to modification loss booked on financial assets, primarily due to change in the bank rate by RBI by almost 75 basis points since the starting of this current quarter.
Talking about the profit and loss on the standalone basis, the trust recorded a total income of INR 298 crores, consisting of dividend from subsidiaries of INR 184 crores, interest income on loans extended by trust to SPVs of INR 100 crores, and other treasury income of INR 66 lakhs. EBITDA for the said period works out to INR 297 crores. During the said quarter, an impairment in the value of investment is booked, which amounted to INR 330 crores. The main constituents for the same were interim distributions to the unit holders in June 2025, change in the bank rates, and approval pending for certain GST change in law from NHAI. Since distributions from these SPVs to the trust are tax-free in the hands of trust, the tax outflow on the standalone level is only on the other income earned by trust. Thank you all for your attention.
All other information is available in our presentation. We can now open the floor for any questions you may have.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jainam Jain from ICICI Securities. Please go ahead.
Thank you for the opportunity. Sir, can you help us understand the loss on modification of financial assets worth INR 180 crore, which you have booked in this quarter?
As per Ind AS, there's a booking of financial assets based on the estimates we have from the NHAI on the HAM projects. Whenever there is a change in the estimates, we have to book the modification gain or loss. Since there is a change in the bank rate, as I've already mentioned, the 75 bps starting from this quarter. That actually made this entry to happen in the books. This is though a notional entry, but it actually depicts the overall cash flows expected from the NHAI in the coming years.
Okay, sir. I got it. Are there any specific assets which we are looking to acquire in FY 2026?
Sorry, I.
Can you repeat the question?
Are there any specific assets which we are looking to acquire in FY 2026?
Yeah. As I wrote in my speech, we have received a ROFO notice from sponsor. There are three assets that we are going to acquire, and we are starting the due diligence and evaluation of that. Those assets are located in Chhattisgarh, in Bihar, and in Rajasthan.
Okay, sir. That answers my question. Thank you so much, and have a good day.
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Sonia Keswani from Coheron Wealth. Please go ahead.
Hello, thanks for the opportunity. Sir, when I heard your opening remarks, you were talking about adding close to INR 2,500 crore in the AUM. Can you share a similar target for FY 2027?
Thanks, Sonia. Sonia, I think we are looking at adding a similar kind of numbers in 2027 also, right? We are looking at adding three to four assets this year. Three is going to come by quarter three, quarter four, and next year also we will have similar kind of target of adding around four assets, right? AUM can be around INR 3,000 crores, but similar four assets will be there. That is only from the sponsor piece at this point of time. But in case we get a value-accretive deal from outside the market, we can look at that also. But four is definitely, I think we should be looking at for FY 2027.
Okay. Can you help me understand the competitive landscape for third-party HAM asset biddings? What are the strategies that you are adopting to secure these assets at attractive IRRs?
It is all market-driven, Sonia, right? I think so. They are asset in the market, HAM asset, but they are, HAM is a very scattered kind of asset with multiple players, right? We are looking at the right kind of asset with our investment strategy and which is value accretive. But in terms of the IRR, that part of it, I think so it will be value accretive to the stakeholders. As and when we get into that kind of a discussion, we will definitely update the unit holders on that.
Okay. Got it. And sir, my last question would be around EBITDA. You have posted an EBITDA loss for this quarter. Can you share any guidance for FY 2026? Can we expect an EBITDA positive figure for the full year?
Sonia, thank you. But the EBITDA excluding the extraordinary loss, which I was explaining about the notional loss, which we have to book due to the change in the estimates. Excluding that, we were already EBITDA positive and as for the market, there is expectation of further dip of 25 bps in the interest rates, in the bank rates. Apart from that, if nothing go beyond change in the estimates of the revenues and expenses are mostly fixed for our trust. We expect this figure to become positive by end of FY 2026.
Okay, sir. Thank you. Those were my questions. Thank you much.
Thank you.
Thank you. Participants may press star and one to ask a question. The next question is from the line of Nidhi from ICICI Securities. Please go ahead.
Thank you so much for taking my question. Your debt to AUM has crossed the 49% mark. Is this a breach as per the InvIT regulations? If so, what steps will be taken to rectify?
Yeah, thanks, Nidhi. Under the InvIT regulation, you should be within 49%, but this breach is mainly on account of the change in the bank rates, right? Which is the market movement. We have already intimated to the trustee and we have six months timeline to rectify this. As and when as we going to add three new assets in this quarter three, right? We will be going to resize our debt accordingly so that our AUM debt comes basically is within the 49% limit. It's a temporary breach, it's not a permanent breach.
Are you looking to acquire any assets from third party other than your sponsor?
Yeah. That is always a part of our strategy, right? One is a sponsor ROFO pipeline, which is already very strong. Beyond that, we are also looking for third-party asset as and when we get a lucrative deal for something which is value accretive, we will definitely be pursuing that.
All right. When these assets do come up for bidding, how are you looking to fund these acquisitions? What will be your aspirations for how the debt could be as a percentage of the AUM?
I think so it is a long-term strategy. We would like to keep our debt to debt leverage basically around 49%. This year we are looking for fundraise to fund these three assets, right? It will be a combination of a debt facility. Next year when we are looking at an asset, it can be a possibility that we do only through 100% debt acquisition because we have the probability to go to 70%, which is what regulation allows us. We can take our debt to around 60% and that headroom will allow us to buy the assets without any further fundraise. This is now a discussion point. The strategy may change, but FY 2027, that is our thought process at this point of time.
All right. Thank you so much for taking my questions.
Thank you. Before we take the next participant, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Anupam Jain, an individual investor. Please go ahead.
Hi. Good afternoon, everyone. Sir, firstly, I would like to thank you for giving me this opportunity. I have two set of questions. First one is, as you mentioned that we are planning to add three assets during financial year 2026. Could you please share the expected IRR for these acquisitions?
These are. Thanks, Anupam. These will be market link driven, right? But I can give you a ballpark number. It will be something between 11%-11.5%.
Okay. My second question is, how do you intend to finance these acquisitions? Will they be funded by entirely through debt or internal accruals?
Anupam, we do not have a headroom for the debt piece of it. Nidish spoke to me. We will be doing a fundraise. It will be a pref plus QIP kind of a scenario. It will be partly funded by the equity, and the debt will be refinanced after resizing.
Okay. Clear. Thank you so much for taking my questions. Thank you.
Thank you. To ask a question, please press star and one now. Participants who wish to ask a question may press star and one at this time. I repeat, participants who wish to ask a question may press star and one at this time. The next question is from the line of Gautam, an individual investor. Please go ahead.
Hi, sir. Just want to understand how the equity fundraise size would be like and what is the DPU dilution expected, if possible?
Thanks, Gautam. Gautam, the fundraise will be something around, say, INR 900 crores that we are anticipating, and there will be partly that sponsor will take units also. It will be a combination of units plus the sponsor units plus INR 900 crore fundraise. Right, and DPU will be value accretive in any case for the existing investors, right. There will be an incremental value addition. The DPU will be value accretive on that part of it.
Got it, sir. Thank you.
Thank you. Participants who wish to ask a question may press star and one at this time. To ask a question, please press Star and One now. The next question is from the line of Jayesh Gandhi from Baroda BNP Paribas Asset Management. Please go ahead.
Hello. The question I have is that on the existing book assets that you own, what is the payout or dividend per unit that you can sustain for next few years?
Thanks, Jayesh.
Hello.
HAM asset has a very predictable and stable cash flow, right?
Yeah.
We are hoping that the kind of DPU that we are maintaining now, right, it should be able to survive for three to four years at least.
And your objective is to add new assets so that you can sustain that for a longer period of time? Is that what you're looking at?
Yeah. We are looking at a double-digit kind of a return, right, for the longest period of time. And we keep on adding HAM assets, so you can expect a double-digit return, right, for a longer period of time.
Right. So every year you would be looking. Because I am seeing a presentation, you are talking about asset growth up to 11,000 crores. So every year you would be adding two assets, two, three assets?
Yeah. As per our document that we have filed, right, there are 17 assets, 17 ROFO assets from sponsor, right. So that gives us a headroom for next four years of growth. Okay. We are not even counting the third-party assets which are yet to be acquired. So I think that the next four years' growth is already captured in our document, and as we get opportunity to add third-party assets, so that will be incremental part of it.
I understand that. I guess what I was trying to get at is that how do you bring that equity for these new assets? Because while you may have equity for next one year, but how do you add those assets in the subsequent years?
Yeah. Jayesh, to answer this question, we are looking at adding equity this year of INR 900 crore. The next acquisition, which will happen next year, we may fund it through debt because we get the headroom of 70%. We will take the debt to around 60%, and we can do the acquisition next year through the debt part of it. Then again, the third year, we can come with an equity part of it. By that time, we have demonstrated in the market with our quarterly guidance and everything. Equity should not be a challenge in terms of raising for the market.
No, I understand. Basically, you would be doing equity raise at one every two years or something like that.
Typically, it looks like now, as of now. But in case we get some better asset next year, the investor is ready for that, we can do next year also. It is a very dynamic market. You understand?
Yes, sir. Thanks for the feedback and all the very best.
Thank you.
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Gautam, an individual investor. Please go ahead.
Hello, sir. Just a small clarification I wanted. If this INR 900 crore of equity fundraise will happen, and the remaining out of the INR 2,500 crore or so expected to be acquired, how will the remaining part be funded, especially as there is no debt headroom there?
Gautam, there are three parts to the INR 2,500 crore. For example, we take a number INR 2,500 crores, right? One is the debt refinancing piece, which will be a part of it. Okay. Which we will be resizing the debt, right, to come to around below 49%, say 45%-46%. The balance part which is left is your fundraise and sponsor, which is taking the units, right? That portion will include both the things. It can be 50/50, it can be around 60/40, but INR 900 crores will be around the fundraise, and the balance portion will be a sponsor taking the unit against the equity that he is selling for the asset.
Got it, sir. Thank you.
Thank you. Participants who wish to ask a question, may press star and one at this time. The next question is on the line of Anupam Jain, an individual investor. Please go ahead.
Thank you for the possibility again, sir. When are you planning to add TOT assets?
That's a part of our long-term strategy,[inaudible ]. But it will take around couple of years down the line to add the TOT toll assets.
Okay. Also, can you please give guidance for the next year DPU?
We can give you next year in the April, to be honest with you. Once the board approves it.
Okay. Got it. Thank you.
Thank you. Participants who wish to ask a question, may press star and one. To ask a question, please press star and one now. I repeat. Participants who wish to ask a question, may press star and one at this time. To ask a question, please press star and one now. Participants who wish to ask a question, may press star and one now. The next question is from the line of Parthiban, an individual investor. Please go ahead.
Thank you for taking my question. I would like to ask with the current strategy of initial equity raise followed by debts and equity raise, will you be able to sustain this kind of distribution for the upcoming, let's say, 10 years, or will it be DPU accretive? That is my question.
Sorry, I could not hear your question. Can you repeat it, please?
Sir, with this kind of strategy of equity raise, that is equity dilution followed by debt monetization, will you be able to sustain the DPU for, let's say, five to seven years, or will it be DPU accretive?
It will be a DPU accretive, right. I cannot commit on five to seven years, but definitely it will be DPU accretive and value accretive to the unit holders.
Okay. Thank you. At least, will it maintain the DPU, the equity dilution?
No. So, your good name, sorry.
Parthiban.
Parthiban. I think so. We are hoping that should be maintained. But I can give you a guidance next year of what it will be. But overall, if I look at it, our objective is to maintain or increase the DPU.
Okay. Thank you.
Thank you. The next question is from the line of Gautam, an individual investor. Please go ahead.
Hi, sir. Just want to clarify one doubt regarding the acquired to be acquired assets. I think the Hasanpur highway is under construction. Has the PCOD happened? I mean, in the last upgrade it was under construction, I had noted. Is the PCOD over? And if so, what is the strategy? I mean, is it 80%? Is it in the threshold, the overall AUM threshold, or how is it calculated?
Gautam, actually, there are two packages of Hasanpur. The package that you are referring to is a part of nine assets for which we have already applied for the completion certificate. That had achieved the PCOD and was meeting the InvIT regulation guidelines of completed revenue-generating asset because we have already received the PCOD. The three assets that we are acquiring now, that does include one more package of Hasanpur, and that also has got the PCOD and it meets the InvIT guidelines for completed revenue-generating asset.
Sir, is it that if two distributions have happened, then it is so, or even if the starting of distribution will be.
No. The law says that one year of operation. It doesn't specify two distributions or two annuities . We have to look from the day that we have got a PCOD one year, and we can put it in the InvIT.
Got it, sir. What is that 20% under construction? Is it on the bit cost? Is it on the AUM? How is it calculated?
20% of?
Under construction assets can be held in the books of the.
Yeah. I think for a public InvIT, Gautam, it is actually 80/20, but 20% also 10% can be under construction, and 10% can be in the liquid funds, basically. It is basically 90/10 from that perspective. 10% of our AUM can be under construction assets.
Got it, sir. Thank you.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you, everybody, for the questions. Capital Infra Trust has had a strong start this listing. We are well-positioned for a sustainable growth backed by a robust portfolio, a strong sponsor, prudent financial management and a clear vision. We are committed to delivering consistent and superior yields to our unit holders, building long-term value, and contributing significantly to India's infrastructure development. Thank you all once again for joining the call and sparing your time, and thank you very much.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.