We note that this conference is being recorded. I now hand the conference over to Mr. Vikash Verma from EY. Thank you, and over to you, sir.
Thank you, Mano. Good afternoon, everyone. Welcome to the Quarter 4 and FY 2025 earnings call of Capital Infra Trust. On behalf of the company, I would like to express our gratitude to each of you joining the call today. To discuss the performance of the company and to answer the questions, we have with us from the company, Mr. Manish Satnaliwala, Chief Executive Officer, and Mr. Amit Kumar, Chief Financial Officer. Our investor presentation and the financial results are available on the company website and the stock exchanges. Before we begin, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties and other factors which will be beyond management control. We kindly request that you bear in mind there may be uncertainties when interpreting such statements.
We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I would now like to invite Mr. Manish Satnaliwala to make his opening remarks. Over to you, Mr. Manish Satnaliwala.
Thank you, Vikash. Thanks for the introduction. Good afternoon, everyone, and welcome to the maiden Quarter 4 FY 2025 earnings conference call of Capital Infra Trust. I extend my sincere gratitude to all our investors, analysts, and stakeholders for joining us today. This is a momentous occasion for us as we reflect on our successful listing, where we raised around INR 1,578 crore and now present our first earnings results. Today, I would like to touch upon the vision, our growth strategy, our core competencies, updates on the industry and operational piece, our FY 2026 guidance, and the financial highlights. I have with me Amit Kumar, CFO, who will be briefing you on the finances of the trust. We will start with the vision of the Capital Infra Trust. Capital Infra Trust vision is based on CG framework, which includes first is growth.
When we talk about growth, we wanted to commit to achieve an AUM of around USD 5 billion by 2030. The second G stands for governance. Best-in-class governance practices in place. We build a board management, professionally managed team, independent infrastructure, and a top five audit firm. Beyond the normal regulatory or best governance in place, we also have a very unique structure of PMA and ROFO agreement, which I'll touch upon the next slides going forward. The third G stands for goal, which is to deliver sustainable distribution with risk-free consistent returns. The board has approved a vision statement which reflects our focus and strategy and execution. The statement is the ability to deliver consistent and superior yields for our investors by combining expert asset management with innovative structuring, prioritizing transparency, disciplined risk management, and long-term value creation. Coming to on slide number seven.
How do we strategize our growth to achieve our vision? First, we're driving the robust AUM growth. We plan to add through strategic asset acquisition, backed by strong fundamentals to deliver sustainable returns. In terms of robust AUM growth, we'll be looking at adding sponsor assets, three to four assets in Q2, Q3. This will actually impact our AUM, which will increase the AUM by 80%, which will provide further revenue momentum leading to sustainable yield and predictable DPU. Coming back to the strategic asset acquisition on slide number eight, slide number nine. We have around 17 ROFO assets, which covers around 12 states, with a Bid Project Cost of around INR 70,000 crore and 2,008 kilometers.
We have made a strong start in terms of our assets under management is around INR 4,912 crore. We have total 9 HAM assets. Seven states are covered. We got listed on January 17, 2025.
The average residual life of all the projects is around 11.30 years, and we have made the highest distribution till today by any InvIT, which is INR 23.89 per unit. Coming back on the core competencies. Slide number 11. Capital Infra Trust is backed by a strong sponsor, Gawar Construction Limited, which has 25 years of experience and is an EPC player into road and highways, metros and bridges. Gawar Construction has 17 HAM projects at this point of time. We have 3,000 employee strength, which is a double A stable credit rating, CRISIL and ICRA. It has INR 800 crore plus strong cash actuals. There's a pan-India presence of 18 states and has a strong order book of INR 16,000 plus crore.
What separates Gawar Construction as a strong sponsor is that they deliver the asset on time, so they have got early completion bonus on maximum projects. Secondly, they don't have any outstanding litigation with National Highways Authority of India till date. The third is they have a very efficient operating cycle of 3 months including good company data, which is better than the peers. What makes Gawar Construction a capable project manager? We have tried to highlight that in slide number 12. It is their strong execution track record, the operational efficiency. They have in-house design and engineering department, a large experience of management of manpower, and they have a healthy liquidity position.
So both a robust balance sheet where both sponsor and project manager are the same entity, Gawar Construction Limited. Timing is the top priority, and again, there is no outstanding litigation with National Highways Authority of India till date.
This makes Gawar Construction a very capable project manager for managing our portfolio. Effective portfolio management. We have made a very strong start with our initial portfolio. Slide number 13, if you look at it, we have put up details on that. Basically, the nine assets with their PCOD and COD dates, a bid cost of INR 9,000 plus crore. The total annuity payable is around INR 6,000 crore, and total annuities received till date is around 60 out of the 270 annuities. Coming back to the cooperative advantage, what the Capital Infra Trust holds on us. There are four unique value propositions that we have highlighted here, and as I highlighted in my first slide in terms of the governance piece of it. We have a very unique PMA structure, which I would like to take a couple of minutes to highlight.
That generally, a contract or an agreement always have a termination clause or an exit clause. In case of a project management agreement in our case, Gawar Construction has given us, there is no exit clause for first five years of their agreement. The cost is totally fixed for the entire life of the asset, but the first five years, despite the cost going up on any account or any reason, Gawar Construction here will not be able to terminate the agreement. Yet, the investment manager has the right to terminate the agreement. This gives an added advantage and flexibility to the investors because your cost is fixed for first five years, and you can actually put a number to that part. The second advantage that we have is a ROFO agreement. In case of our agreement, the ROFO is for 10 years.
Any asset that the sponsor develop for next 10 years will be a part of it. The sponsor today has 17 odd assets in the portfolio, and any asset that they develop will be a part of our part of it. If the ROFO falls through, the agreement has a clause, which is beneficial for the investors, is that if the ROFO falls through, the sponsor can sell the asset below the counter offer of IM. That is an enabling clause which helps the IM and the investors. As surety that, okay, if the pricing is there, the sponsor can go in the market, but he cannot sell it below that price. The third advantage is the tax benefits on dividends, in which is a unique structure, where actually if you are SPV are having an old tax regime.
And if the dividend is payable by then the dividend to the unit holder is tax-free. In our case, there are 2 assets, which one is BRT, another Nainital, where we follow the old tax regime, and the dividend is tax-free in the hands of it. In terms of the ROFO assets, most of the ROFO assets will also have this kind of benefit attached to it. Third and the important one is the optimized debt structure. We have done two FCBs in the month of February and March, which have been at a very competitive cost with an accepted payment schedule, which has been very value additive. And we continue to ensure that, okay, we benchmark also with the market and be very competitive in terms of the debt cost.
Slide number 16, if you go to the management team, we have a credible board, starting with Mr. Yudhvir Signh Malik, who is the chairman and independent director of the board. He has been serving as secretary MoRTH and ex-chairman National Highways Authority of India. Mrs. Vijayalakshmi R Iyer, she has been ex-CMD of Bank of India, and she sits as an independent director on multiple boards of Aditya Birla Capital, Axis Securities, Landmark Pharmaceuticals, and many more. Mr. Satish Chandra, he is a retired IAS officer. He was a member finance National Highways Authority of India and retired as additional secretary of Home Affairs in Punjab.
In terms of the key managing person, I am there. Amit Kumar CFO is there. I have been in this InvIT space for last six years. Amit has been working with banks. He has done lot of funding for the InvIT piece. Suparna is the compliance officer.
We have three directors for the sponsor piece. Mr. Rakesh Kumar is the promoter director. Mr. Nirav Saroj is the son of Mr. Rakesh Kumar. Mr. B.S. Singla, he has been as a sponsor director and in a FTT role at the GCL level. In terms of the industry overview, the Indian infrastructure sector, particularly the road segment, presents a compelling growth story. Since 2014, the national highway network has expanded significantly by 60%, underscoring government's ongoing commitment to the infrastructure development. This commitment is further reflected in statutes such as approval of eight national high-speed corridor projects encompassing 936 km of new highways and substantial allocation of INR 2.7 lakh crore to the Ministry of Road Transport and Highways in the Union Budget 2024-25. Within this broader infrastructure landscape, the InvIT segment in India witnesses a robust momentum.
Currently, there are 27 InvITs of which 16 are road InvITs, clearly dominating the segment. Road InvITs have experienced significant growth, a trend predicted to continue in long run. We anticipate AUM of all road InvITs to grow by 68%, from INR 1.9 lakh crore in September 2024 to INR 3.2 lakh crore by March 2026. This growth will be driven by two factors, diversification of assets held by existing InvITs and the emergence of new InvITs like ours. Over the past seven years, the government has successfully rolled out approximately 400 odd projects across India. These projects give strong acquisition opportunities with an estimated INR 600 trillion of odd projects likely to become available over the next two years. We come on to operational performance. In the quarter ended FY 2025, there will be satisfactory road condition of all the main carriageway, all the projects.
There has been zero fatality at our road and highways. There has been zero encroachment on our road and highways, and there is no damages that have been labeled by the authority. As of today, there are six projects which have achieved the COD. One project is 100% complete, and two are nearly completion. All these three projects have received the PCOD. In terms of riding quality, there is a satisfactory riding quality in all the projects. Coming to the guidance piece of it, slide 22.
We are looking at a value additive distribution to unitholders, and the board has approved the guidance for around INR 14.61 per unit for this year, of which INR 2.61 unit is being given as a quarter one interim distribution, and the balance will be given over the period of time. So this calculates to around 14.75% yield on a issue price of INR 99.
Coming to the last slide from my side, which is slide number 28. In terms of the investor base, we are proud to say that we have a very well-diversified investor base with SBI Group being the largest investor, which are holding around 9.2%. In terms of category of investors, we look at it is held by corporate around 12%, held by Pension Fund, AIF, FPI, Bank by 70.6%, and insurance around 10.5% and mutual funds 11.5%. This is what is from my side. I like to hand over now to Amit, who will take you through the finances piece of it.
Thank you, Manish. Good afternoon, everyone. I will now be taking you through the key financial updates. We have concluded the financial year 2025 with a strong AUM of INR 4,912 crore, with maintenance of debt to value of assets ratio at 44%. Referring to slide 14. Post listing, we have issued NCDs totaling to INR 2,363 crore at a quite competitive cost of debt at approx 7.68% per annum and is payable half yearly. Funds raised through NCDs were utilized for repayment of existing external debt at SPVs. In total, our trust has on lent INR 3,405 crore out of the issue proceeds of INR 1,042 crore and INR 2,363 crore from NCD proceeds. The loans extended were utilized by SPVs for extinguishing their outstanding debt, including the unsecured loans. Both of these NCDs are rated AAA by CRISIL and CARE for their debt amounts.
We are on slide 26, 27, wherein in the period under consideration, the project SPVs have distributed a total amount of approximately INR 691 crore to the trust, constituting this dividend income of close to INR 546 crore, interest income of INR 50 crore and repayment of debt of INR 95 crore. After adjusting for the financial costs, trust level expenses and provisions for statutory dues at trust level, the NDCF at trust level works out to approx INR 658 crore. The distribution per unit for the quarter ended March 31, 2025, works out to close to INR 23.89 per unit. Out of which, INR 12.71 per unit was distributed in February 2025, and remaining close to INR 11.2 per unit is likely to be distributed now. Total distribution will be in the form of INR 18.1 per unit as taxable dividend, INR
1.4 per unit as tax-free dividend, INR 1.1 per unit as interest, and INR 3.4 per unit as repayment of debt. The distribution for the first quarter is high, primarily on account of release of funds from the reserves such as DSRA, MMRA or working capital reserve was required to be maintained with the existing lender at SPV levels, which, as I said earlier, the entire debt at SPV level has been paid off. Going forward, distribution is expected to be consistent and sustainable, as Manish has explained in the earlier slides. In addition to this, the board has also approved interim distribution of Q1 FY 2026 based on the NDCF calculated for April month, which amounts to INR 71 crore, translating into distribution of INR 2.61 crore per unit. We are on slide 24. On a consolidated basis, total income works out to INR
INR 170 crore with net loss reported of INR 37 crore. Since the accounts have been prepared for the first time for the period starting January 14, 2025, that is date of acquisition to March 31, these financials are only for close to two and a half months. Our external debt at console level stands at INR 2,363 crore, as mentioned above, raised during the year to repay the existing debt at SPV level. Just to reiterate, there is no external debt outstanding at SPV level. Talking about the profit and loss on standalone basis, the trust recorded a total income of INR 405 crore, consisting of dividend from subsidiaries of INR 352 crore, interest income on loans extended by trust to SPVs of INR 52 crore, and other treasury income being INR 72 lakhs.
EBITDA for the said period works out to close to INR 388 crore. During the said quarter, impairment in the value of investment was booked, which amounted to INR 444 crore. The main constituent for the same was interim distribution made of INR 350 crore to the unitholders in February 2025, change in the bank rates, and approval pending for GST change in law from NHAI. Since distribution from SPVs to trusts are tax-free in the hands of trust, the tax outflow on the standalone is only on the other income earned by that trust. Coming to the balance sheet side of the trust on a standalone basis, excluding the investments. Fair value of the investment in SPVs as assessed by the valuer was of INR 1,649 crore in the books, as against the consideration paid for the similar amount for acquisition of those assets.
On consolidated basis, our debt stands at INR 3,236 crore, as mentioned above, raised for repay the existing debt at SPV level. Thank you 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 so much, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question, you may press star and one. 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. We have our first question from the line of Paras Gupta from Pramerica Life Insurance. Please go ahead.
Hello. Yes, sir. My question is that, you said in your presentation you are planning to add some four assets in FY 2026. I want to know what is the timeline of these assets in this financial year, and how are you planning to fund these assets?
Hi, Paras. Good afternoon. As I said earlier, Paras, we are trying to add in Q2 or Q3, maybe September, October timeframe. We will be adding three to four assets. And this will be partly through fundraise and partly through units that sponsor will be taking.
Yeah. When you say partly, you mean 50%-50%?
We are yet to come with the right structure. But I think it will be a combination of units and fundraise. Okay. We are yet to finalize the structure.
Okay. Thank you, sir.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Nikhil, an individual investor. Please go ahead.
Good afternoon, sir. Thanks for this opportunity. I had a few questions on the InvIT level. Just wanted to check with you, like you said that there will be four new assets that will be added by FY 2026. What is the kind of AUM growth that you are expecting for the year?
Hi, Nikhil. Good afternoon. We are looking for around INR 3,000 crore of AUM. As I said in my earlier presentation also, it is 80% growth on the current AUM. That is what we are expecting. Our aspiration is to add around INR 11,000 crore by 2027, which is already there in the part of our presentation. We are looking at adding four assets this year, four assets next year.
Okay. With this sort of AUM, the current NAV, which is at 82, what is the exit NAV that we are planning to have?
We are yet to get onto the numbers. I think there will be a positive impact on that because there will be the assets INR 3,000 crore with the combination of units plus the fundraise, they will have a positive impact on the NAV. I cannot give you a number at this point of time.
Okay. Sir, I had one more question, maybe at the industry level or at the sponsor level. What you are seeing for the past maybe one and a half or two years, there have been no orders from the MoRTH and NHAI. Though you have a ROFO for 17 assets. In future, what are we seeing at the sponsor? How are they going to get the assets? Because there has been no state or national highway orders that have been awarded.
Yeah. You are right, Nikhil. I think the bidding process has been slow. In January 2024, I think NHAI has released 54 projects worth INR 2 lakh crore. I think this is a business cycle that comes up and down. I am hoping that by this year, by next year, you will start seeing more bidding part happening. If you look at a two and a half or three years of a construction cycle. From a sponsor perspective, we have enough assets for growth for next three to four years. Plus, we are also looking at third-party acquisition, so we will be open to look at a value-additive acquisition. We do not see limiting any growth prospect for our Capital Infra Trust. I think the cycle of NHAI bidding will definitely change.
Okay. Are we expecting the HAM to be the preferred mode of awarding in the future as well, or it would be changed to BOT?
Yeah. See, I think so BOT last three years has not been very active. But I think so now what I see a projection is around 20%-25% may be a BOT, but HAM will continue to dominate, I think so. That will always be there, and which is already captured in our presentation if you look at slide. We have already given the share what will be there. HAM will continue to be there, but I think the BOT with the new MCA that the NHAI has released now, you will see more traction on that.
Okay. And sir, what are we expecting on the construction grant of 40%? Are we expecting to go down to maybe 20%, 10% or 0% like in the case of BOT or we are expecting it to continue with 40% itself?
Well, very difficult to answer, Nikhil, to be honest, right? I think that we have to wait and watch how it turns out.
Okay, sir. Those were my questions and thank you for answering those. Best of luck.
Thank you. We have our next question from the line of Viral Shah from Ambit Wealth. Please go ahead. Viral, are you there?
Yeah. Hello. Can you hear me? Yeah. Hi. Am I audible?
Yes, we can hear you.
Yeah. Sir, you did mention that you were supposed to take around 4 new assets next year. So basically, are these assets organic or they are going to be acquired by whom?
Viral, good afternoon, first of all. Can you just repeat your question? When you say organic, inorganic means?
These are under construction assets which will be get. These are-
No, sir. We are going to add the operational assets only. The assets-
Okay.
Which actually fit the definition of SEBI regulation of completing one year of operations. Right?
Okay.
At this point of time, we are looking at sponsor assets, three to four. But we are also open to the third party acquisition in the market if they are value accretive deal.
Got it. So basically, when you are looking at third party and when you are looking at are we only-
Sorry to interrupt, Mr. Viral Shah. Sorry to interrupt. We cannot hear you. Your voice is breaking a bit.
Is this better?
Yeah.
So basically, sir, wanted to understand that when you are looking at acquisition or from the sponsor or third party, are we only looking at road, or we would be looking at other diversified assets as well?
Yeah, I think there is a lot of potential in road at this point of time, Viral Shah.
Yeah.
We do not want to deviate our focus at this point of time. We want to continue with the road only. Be it sponsor, non-sponsor. As we grow and it is a sizable part, then we can look at adding something which can be integrated with the road part of it.
Got it.
As of course, simply next three to four years, our focus will be on road only.
On road only, right?
Yeah.
Basically, are we looking for HAM as well, or basically BOT, HAM? What is the mix we are looking at as of now? From the new point of view.
I think overall strategy will be to have 80% HAM, 20% toll, BOT toll.
Yeah.
The reason for that is because BOT toll offers you extended concession period, whereas HAM has only 15 years. We want to-
Yeah.
have that mix part of it. Even if sponsor is looking at bidding at the toll projects, maybe in two or three years down the line, we can see sponsor also putting a toll assets in our InvIT, or we can look at acquiring from third party also. But we are not averse to a toll project. If it is a value accretive, we can look at acquisition of that also.
Got it. Just last question from my end. There's cumulatively four assets which we were supposed to add in FY 2026. What is the price to book of acquisition which we are looking at as of now?
Well, we do not have a readymade answer, to be honest, Viral Shah.
Okay. But any range particularly that we will be comfortable with?
As I told earlier, the AUM will be growing by around more than 80%, it will be around INR 3,000 crore of AUM growth.
Yeah. Can I add last one, if possible?
Pardon?
Last question. Can I add one more question, if possible? Yeah. Just last question from my end. When you look at the IRR of acquisition, what are we looking at in terms of IRRs from project and equity point of view?
Yeah, I think it will depend on the market. We have already seen two rate cuts already, right? There are talks that there will be two more rate cuts. I think G-Sec has already come down to 6.25%. It will be market linked, but it will be value accretive to the unitholders for sure. You can be assured of that.
No, sir. But maybe what is the kind of IRR which we are looking at because
Sorry to interrupt, Mr. Viral, again. We can't hear you properly.
Hello.
Still we can't hear you, Viral Shah.
Hello. Hello.
Yes, now we can hear you.
Yeah. Sir, just to add on. Lastly, the new assets which we are looking at acquisition, from a tax point of view, are they under the old regime or the new regime? Because old taxation definitely gives a lot of edge, and there is a lucrative option of IRR which can be higher.
Yeah. Informally, I think we have around couple of assets which may be under the old regime.
Yeah.
There will be some assets which we will put in that four assets which will be a part of old regime.
Okay, got it. Whatever assets which we are owning as of now, what is the average toll rate hike or maybe toll rate during the year as a whole for the average asset which are under operation?
No, we do not drag a toll rate hike. I think this is a HAM project.
Yeah, so I agree, but for the BOT part, we would be looking at it, right? Or we don't have any as of now
Yeah. That should be around 4.5% in terms of the growth. Yeah.
Got it. Done, man. Thank you. That's it from my end. Thank you, sir.
Thank you. We have our next question from the line of Sheetal from Shriram Mutual Fund. Please go ahead.
Hi, sir. Good afternoon. Sir, I just wanted to understand, can you give a broad breakup of the DPU? You had mentioned in your opening remarks a DPU of about 14.6 is expected for FY 2026. Could you just provide a broad breakup in terms of the dividend?
Good afternoon, Sheetal. Sheetal, we don't have the exact breakup on that part, but I think if you take informally, if I can tell you, it can be a 25% dividend, 25% interest, and 50% maybe the repayment piece.
Okay, sir.
But we have to validate the numbers.
Towards the later part we will get clarity?
Pardon?
We will get this clarity maybe at the later part?
Yeah.
Maybe in April sometime?
I think so the board has also agreed in terms of making quarterly distributions. Going forward, we will make a quarterly distribution. When we make the next distribution of June quarter in August somewhere, then we may have a better clarity on that.
Okay. Understood. Thanks. I have another question, if I could squeeze in.
Sure.
I just wanted to understand, sir, how is our Capital Infra Trust InvIT different from the other road InvIT? Basically, in the past, the performance of road InvIT has been very stagnant. How do we see our growth coming in?
I can't comment on the competitors part of it, but if you look at our unique value proposition that I just discussed in my earlier slide, first and foremost is our unique structure with the PMA structure. I think where the sponsor is committed that, okay, the agreement can't be terminated before five years. There is a major maintenance in all the roads of one cycle. Even the cost goes high of the bitumen or any other reason, sponsor is taking that commitment that there's no cost escalation for the InvIT. That's a very unique structure because generally all the contracts have a termination clause from day one. But in our case, there's no termination clause from the sponsor side.
The second way how to grow the InvIT, sponsor is already committed for providing a ROFO agreement of 5+, five years. But our unique structuring in the clause is that, in case the counteroffer of the investment manager to the sponsor is not acceptable to the sponsor, the sponsor can't sell at a price below that counteroffer. This becomes a decrement, even for the sponsor. Because by default or the way InvIT is structured, they will always offer a better pricing compared to the market. If you go and sell a standalone SPV vis-à-vis an InvIT, it will always be better pricing. I think these two factors will differentiate us on that part of it. Of course, dividend and the debt part is a different ball game.
Got it, sir. Also, sir, if I could understand, what are these risk measures or what do we see as the risk factors for our kind of a business or our InvIT? Like probably the delay. Now what we saw is last year, we saw a delay in basically the government budgets because of elections. Do we see that as a risk factor? What are the risk measures for these kind of things? Because obviously this will push the project further.
Yeah. From a business perspective, you look at it, the bank rate is one of the risks that we keep on tracking. Because if the bank rate goes down, our revenue comes down because of interest on liability. That is the only business risk that we see. From a growth risk perspective, I don't foresee a growth risk for next four to five years. I just explained to somebody on the call that even if the bidding has been slow for NHAI, the cycle will definitely turn. Because you take two or three years of a construction cycle and looking at Gawar Construction, who have been very good in terms of execution, and they've been delivering before time the project.
I don't see, in terms of a depth of the projects coming in and third-party acquisition, we are always at look for it. So I don't see a growth coming and as a hindrance as a part of the risk.
Okay, sir. Got it. Thank you. I'll join in if there are further questions.
Thank you. We have our next question from the line of Goutham Kamepalli from Gland Family Office. Please go ahead.
Hi, Manish and Amit. Thanks for explaining on that. I just wanted a quick question on can you expand on the profitability at the consolidated level for FY 2025?
Hi, Goutham. Good afternoon. I will ask Amit to just explain you.
Sure.
Talking about the profitability, since this was only a number we are talking about only of 2.5 months only. There was a loss which we have actually booked in this quarter. But going forward, with the accretion and having the projections, having the numbers financials for entire full year, this profitability would be on the positive side only.
Okay. Regarding the revenue segmentation that previously we used to have, like operating expenses and some interest income from NHAI, O&M revenue, and construction services and other revenues, and operation expenses with our finance costs and everything. That was about in the first half it was about INR 115 crore on INR 792 crore, the profit. Is there any comparable number which we have now?
Comparable number is not actually available since this was the first year for that. But talking about, as you rightly said, the number, which has been set apart for the cash flow. But if you see the profit and loss for any construction company or any InvIT other than us, this is basically depending on the Ind AS presentations only. You are talking about the cash flow, but here it is only the margin income which is reflecting overall maintenance expenses.
Got it. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask any questions. We have our next question from the line of Vishal Periwal from Antique Stock Broking. Please go ahead.
Yes, sir. Thanks for the opportunity. I think some basic question on the structure part, the DPU, which you mentioned for FY 2026, 25% will be dividend. In this, is that fair to understand as the structuring only the dividend portion is taxable, rest they are not?
Good afternoon, Vishal. I will ask Amit to answer this question.
As an InvIT structure, there are three components to it: dividend, interest, and return of capital. If we talk about dividend, there is a two series to it. If the SPV is falling old regime, the dividend is tax-free in the hands of investors, and if SPV is under a new tax regime, it is taxable in the hands of investors. Interest coming up as a distribution from the SPVs is always taxable in the hands of unit holders. Talking about the return of capital, that is tax-free in the hands of unit holders.
Okay. Secondly, you mentioned like the key risk is a lower bank rate. Overall, I think system-wise, probably a repo cut or anything that happens, that is a risk for the NOT that we will get from the authority or how exactly it works.
So definitely, bank rate is the only variable which we see in the revenue side and which actually impacts our profitability. But as the market going forward, we might see two rate cuts further down. But as we committed or what Manish Satnaliwala has told the vision for FY 2026, we have already considered whatever for the next two rate cuts expected from the Reserve Bank of India.
Okay. Got it. Maybe one last thing. You mentioned that the AUM growth will be to the tune of INR 3,000 crore in FY 2026. So structuring-wise, how exactly this gets funded between sponsor and the investors?
Vishal Periwal, as I told earlier, it will be a combination of our units and cash. So we are yet to finalize how much units and how much cash. So that structuring is yet to be taken up, but there will be definitely a combination of both.
Okay. But for sponsor, is it only he get the units or he also contribute the cash in it?
He is contributing the asset and against that he is getting the units. Then you raise fund from the market which will be primary issue basically, funding for that part. And then, of course, there will be debt raise for that again.
Right. Now got it. I think, yeah. That is all from my side. Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Bhavik from TMPL Consultants. Please go ahead.
Yeah. Hi. Good afternoon, and thanks for the opportunity. My question is regarding the NAV. The NAV which is being published is INR 82.26. Question is it before the distribution of INR 11.18 plus INR 2.61 or provision has been provided and this NAV is net of distribution?
Yeah. Good afternoon, Bhavik. The NAV actually includes the distribution part of it, but I think as we keep on adding asset, there will be a positive impact on the NAV. And we are going to add four more assets worth around INR 3,000 crore into the AUM. So that will have a positive impact on the NAV.
Okay. So even the FY 2025, 11.18 is being also not provided. So everything is gross.
Yeah.
Got it. All right. Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Arun, an individual investor. Please go ahead.
Hello.
Yes, Arun. Please go ahead with the question.
My question is regarding this. If you look at your leverage, currently you are at a 44% leverage at the first level. If you want to add more assets. What I understand is that your leverage cannot go beyond 50 now, and you can go to 60 probably after six distributions. How are you planning to add more assets? Because the bank debt or any other debt seems to be very limited. It looks like you have to go for a large dilution when it comes to the listing, the QIP and other thing. Just give me your thoughts on this.
Yeah. Good afternoon, Arun. I think you are right, absolutely right. As we are at around 44%, right, till 66 we can't exceed beyond 49%. And thereafter we have a limit till 70%. But the next four assets that we are looking at adding, right, it will be more of a fundraise, right? Maybe QIP or a preferential issue, right, along with a sponsor taking some units and partly with the debt. Okay? It will be a combination of all these things, but we have to go to a market to raise the funds.
Okay. That you have to do it at the market price at that point of time based on the yield what the market is offering.
Yeah.
It could be a QIP or a this thing.
Or a preferential allotment. Yeah.
Okay. Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one now. Anyone who wishes to ask a question, you may press star and one. We have our next question from the line of Sudhi Sharma, an individual investor. Please go ahead.
Thank you, sir. Thank you for taking my question. I have joined the call late, so I might be asking some repeat questions. Please pardon me for that. Sir, first thing, I wanted to ask on industry. If I see the road awarding, the project awarding has been a little muted in the recent times. How do you see the project award pipelines going forward? Will it increase in, let's say, in next six to eight months?
Yeah. Hi, good afternoon. I just answered this question. I think this is a business cycle. I think sometimes it happens because last year, again, it was an election year. In January 2024, I think NHAI has actually released 54 projects of INR 2 lakh crore. But yes, the bidding process has remained slow for last 18 months. We see that the cycle will turn by this year and by next year. Okay? But that doesn't have an impact on our growth strategy per se because we are well-equipped in terms of the number of assets we have for the growth for next four years, looking at the sponsor piece and also the third-party acquisition even with the market.
Okay, sir. My next question is, as you guys have recently acquired or planning to acquire eight new assets. Could you give me more details on it? What will be the asset size and what is the sustainable yield are we expecting from these projects after the acquisition?
I think we have to do some work on that part of it. I can just say before that, when we take this core asset, the AUM will be something around INR 3,000 crore. I can just disclose that much. But as and when more clarity is there, then we'll disclose that accordingly.
Okay. And sir, beyond that, any plans to add more assets?
Beyond what? I do not understand.
Beyond these eight assets, after these eight assets, are you also-
No, I think so we have already stated that there are 17 ROFO assets with the sponsor, right? We are just giving you an aspiration that INR 11,000 crore AUM will happen by two years, which is March 27, right? But I think so again, 2028, 2029, the assets will continue to be added, right? But we have just given aspiration for next two years at this point of time. So this is something which we can predict upon, and that's why we give an aspiration of two years only.
Okay. Understood, sir. And sir, these four assets which we are planning to add in by 2026, have those projects already received the COD?
Yes, they have received the COD, and one year has been completed. Accordingly, we have done it. COD, pre-COD.
Okay. Got it, sir. Thank you, sir. That's all from my side. If I'll have more question, I'll join again.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask any questions, you may press star and one now. We have our next question from the line of Nikhil, an individual investor. Please go ahead.
Thank you, sir, for this follow-up opportunity. Just wanted to check with you on slide number 20, you have given some industrial data. You mentioned 26 listed InvITs, so that would include public and private listed both, right?
Yes, correct.
Okay. And those 16 road assets that you have mentioned, so in that, how many would be HAM and how many would be BOT?
Pardon, which slide you are talking about?
Sir, slide number 20. Out of those 26 in which you mentioned that there are around 16 road in which, how many
Yeah.
would be HAM focus and how many would be BOT?
I think HAM focus, we are the second InvIT, right? I think there is one more InvIT in HAM, only focus on HAM. But rest InvITs, the road path, they are including both annuity plus tool, right? May not be HAM, but it will be annuity and tool, the other InvIT.
Okay, sir. And sir, this other sector in which, what would that mean? Other than power and road. What was the third category that you have mentioned? There are five InvITs.
There is a pipeline, there is a logistics warehousing.
Okay, sir. Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Goutham from Gland Family Office. Please go ahead.
Hi, Manish and Amit. Just wanted to understand regarding impairment on non-current assets, which is exceptional item present. Just wanted to know how it was arrived at.
Hi, Goutham. I have explained it earlier also that in this quarter, the impairment was booked close to INR 444 crore, and the main consequence for this was interim distribution, which we have given in Feb 2025, close to INR 350 crore. There is a change in rate happened from 6.75% to 6.5% at the closing period date, and there is certain amount which is where the approval is pending from NHAI. That is a GST change in our claim. Consolidating all this, major constituent would be the interim distribution, which we have done in Feb 2025.
Thank you, Amit.
Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Khushbu Gandhi from Ambit Wealth. Please go ahead.
Yes, sir. One question from my side. Since we have nine HAM assets which are under road toll, my question is: are we expecting any major O&M CapEx to be done in the next two years? Have we estimated any major CapEx happening? Going forward, what is the annuity plan on that road toll asset?
Khushbu. Good afternoon, Khushbu. Can you just repeat the question? I'm just trying to-
We have nine HAM assets, right? Under the road highway project.
Yes.
My question is there any major CapEx for the O&M? O&M CapEx, which is going to happen in the next two years.
Yeah. Khushbu, I think so we have a project management agreement, right? So the cost is completely fixed, right? So whatever the cost has to be incurred is already ring-fenced, right? And the sponsor is going to bear that cost of the project manager, right? So from an InvIT perspective, there is no additional outflow, which is already budgeted in the agreement.
Okay. But though it has been budgeted, but any major expense which you are looking forward, though it has been budgeted. Because
No, there is nothing as such which is over and above the budget, right? As I told you earlier, the PMA agreement has a non-termination clause from the project manager side. So for first five years, whatever the cost that has been incurred to maintain the project for whatever reason, will be borne by the project manager. So there is no additional incremental cost that can come onto the InvIT.
Okay. And since we have most of the projects being into HAM, agreed that the government was till now ordering more of HAM projects. But now since it has been two years, the government is talking to get into more of BOT projects. So are you also prepared to look for BOT projects going forward?
So for the InvIT vision and strategy perspective, yes, we are open to looking at acquiring toll projects also. In addition, the sponsor is also looking at bidding for the toll projects and building that part, right? There are two prone strategies. Both the ways the things are working out.
Have we already bided or we are planning to bid it?
No. This is under planning now. Not yet bided.
Okay, sir. That's it from my side.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Hi. Thanks, everybody. Capital Infra Trust has had a strong start since the listing. We are well-positioned for sustainable growth, backed by a robust portfolio, a strong sponsor, prudent partnership management, and a clear vision. We are committed to delivering consistent and superior yields to our unitholders, 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, sir. On behalf of Capital Infra Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your line.