Ladies and gentlemen, good day and welcome to Indus Infra Trust Q1 fiscal year 2027 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kumar Singh, the Chief Executive Officer of the investment manager. Thank you, and over to you, Singh.
Yeah. Hi. Thanks, Renju. Good morning, everyone, and thank you for joining us for the Indus Infra Trust conference call for the quarter ended June 30th, 2026. I would like to start by saying how much we value your time and continued interest in the trust. Last quarter was an eventful one for us and I am really glad to walk you through personally. Just briefly touching upon the macro front, operating landscape for the road infrastructure in India remains structurally robust, backed by strong policy tailwinds and record execution. During the financial year fiscal year 2026, national highway construction reached almost 5,313 km, surpassing the annual target of 4,640 km by nearly 15%.
Under the flagship Bharatmala Pariyojana phase I, progress has been steady with 22,590 km constructed out of the 26,425 km awarded pipeline. A significant portion of this pipeline continues to be executed via the hybrid annuity model, reinforcing their long-term annuity-based income visibility across the sector. Cabinet approvals during the recent quarter further reinforced the government’s commitment to expanding access-controlled economic corridors. Key project approvals across Madhya Pradesh, NH347B for INR 4,415 crore, Telangana, NH63 and NH563 for INR 7,597 crore, Bihar, NH31/NH231 for almost INR 4,000 crore, and Odisha coastal highway from Rameshwar to Koraput for almost INR 8,300 crore, collectively add substantial asset depth to the national logistics network.
For a focused platform like yours, this continuous build-out strengthens the future pool of high-quality operational infrastructure assets and this which is actually entering the monetization pipeline over time. Now moving on to operational highlights and modernization. Against this supportive backdrop, our portfolio performance during Q1 fiscal year 2027 remains steady and in line with our internal operating plans. All operational highway assets within the trust demonstrated consistent, predictable performance. Annuity received from counterparts were received as per schedule and our underlying asset maintenance, safety standards and regulatory compliances remained fully on track with zero material deviations. At a broader industry level, NHAI’s progressive shift towards predictive assessment management, which is incorporating network survey vehicles, which we call NSVs in our parlance, drone analytics, which we call DAMS, and AI-powered dashcam analytics, which we call DASH, is transforming or rather helping to transform operation and maintenance access operational corridors.
We are proactively leveraging these technological advantages to protect asset life, optimize maintenance life cycles, and ensure high operational availability. With respect to capital allocation and portfolio expansion, Q1 fiscal year 2027 has been a good transformative quarter for us in executing our long-term growth objectives. In line with our transaction strategy communicated earlier, we completed the acquisition of KNR Palani Infra Private Limited and KNR Ramagiri Infra Private Limited during the June quarter from KNR Constructions. Furthermore, on June 30th, 2026, we successfully completed the acquisition of ULCCS Kasaragod Expressway Private Limited. These accretive highway assets meaningfully are expected to enhance our cash flow, longevity, and portfolio diversification. To fund these strategic growth initiatives while preserving a conservative debt profile, the trust successfully completed a major capital raise in 2026.
On June 16th, the fundraising committee approved the allotment of 14.28 crore units via QIP placement, which raised almost INR 1,700 crore, alongside a prep allotment of 2.52 crore units to our sponsor, Aadharshila Infratech Private Limited, aggregating INR 300 crore, both at an issue price of INR 119 per unit. Trading in these newly allotted units commenced on June 18th, 2026. Also, to bridge transaction execution effectively, your trust raised INR 250 crore in unsecured listed commercial paper on May 25th, 2026, at a competitive discount rate of 6.90%, which were subsequently listed on debt market segment of the NSE. The successful execution of capital raising across both debt and equity reflects the capital market's strong faith in our governance framework, asset management strategy, and yield delivery.
I would like to also inform you that for the quarter ended June 30th, 2026, the board has approved a distribution of INR 3.55 per unit. Breakup of that is INR 2.38 as interest and INR 1.17 as capital reserve to be paid to unit holders as of record date, which is August 10th, 2026. This will be paid on and before August 17th, 2026. Our cumulative distribution, including the distribution approved in the board meeting held on August 5th, 2026, which was yesterday, stands at INR 31.25 per unit, positioning your trust as one of the stable lead platforms in the country. We continue to actively evaluate additional operational assets from ROFO pipeline and third-party developers, ensuring that future additions strictly meet our criteria of being accretive, operationally sound, and long-term cash generation.
I'll now pass it on to Harshael, who will take you through the detailed financial numbers. After which we'll be open for any queries you might have. Over to you, Harshael.
Thanks, Amit. Coming to Q1 fiscal year 2027 performance on a standalone basis. The interest income on the loan extended by the trust to the SPVs was INR 243.5 crore as against INR 195.03 crore in Q4 fiscal year 2026. The increase in the interest income was on account of the additional debt on lent to three SPVs acquired in the month of March 2026. This was partially offset by the debt repayment done in the March quarter by the existing SPVs to the tune of 470 crore. Details of the loans on lent to SPVs are provided in the statement of related party transactions in the standalone financials. As SPVs have upstream cash flows in the form of interest and repayment, no dividend income was received during the quarter from the SPVs. EBITDA for the quarter was INR 203.70 crore, which included an impairment of INR 38.95 crore.
The impairment was on account of the difference in the fair value and book value of the investments. The total external borrowing of the trust as on June 30th, 2026 stands at INR 5,623 crore as against INR 3,688 crore during the last quarter. During the quarter, the trust availed additional borrowing of close to INR 2,000 crore to refinance external debt in the SPVs. INR 916 crore was availed to refinance external debt of Bilaspur-Urga project and Ujjain Badnawar projects, which were acquired in March quarter, and balance amount of 1,083 crore was availed to refinance debt of KNR Palani, KNR Ramagiri, and ULCCS Kasaragod Expressway projects. Accordingly, the finance cost during the quarter increased to INR 72.17 crore from INR 42.47 crore.
Further, we have availed additional borrowing for these three SPVs on June 30th, 2026 and the interest burden on account of the same will get reflected from the next quarter onwards. The tax outflow on a standalone basis only on the other income earned by the trust and the profit for the quarter stood at INR 127.77 crore. During the quarter, we have completed acquisition of three SPVs at an enterprise value of INR 1,912 crore. The asset-wise acquisition enterprise value of all the SPVs are provided in the Indus Infra presentation.
On a consolidated basis during the quarter, the total income was INR 301.66 crore, which consisted of INR 284.77 crore from revenue from operations and other income of around INR 17 crore. The revenue from operation included finance income of INR 220.78 crore as against INR 156.35 crore in Q4 fiscal year 2026. The increase was on account of the new assets which were acquired during the quarter as well as in the last week of March.
The revenue from contracts, which includes COS, O&M utility and claims for the quarter stood at INR 50.44 crore as against INR 31.59 crore in the last quarter. The total expense for the quarter was INR 162.31 crore as against INR 105 crore in the last quarter. The increase has been primarily can be attributed to the finance income increase to the tune of INR 45.18 crore and sub-contracting charges and other expenses increased by INR 70 crore. The same can be contributed to the additional debt borrowing as well as the O&M expenses of the new SPVs acquired. The total external borrowing on a consolidated basis as on June 30th, 2026 stood at INR 6,344 crore. This is higher as compared to the standalone financials on account of non-prepayment of certain debts on June 30th, 2026, which was subsequently paid out on July 1, 2026.
Going forward, for the existing portfolio, the total debt remains at INR 5,622 crore. Coming to the NDCF, the cash flow from operations of the SPVs and other income of the SPVs combined together was INR 233.66 crore. Considering ease of encumbered cash of the new SPVs and the finance cost at SPV level, the total SPV level NDCF works out to INR 359.29 crore, which was upstream to the investment. Post adjusting for finance cost, trust level expenses, and release of the DSRA reserves created at the trust level on account of replacement of the DSRA requirement to a bank guarantee, the NDCF for the quarter works out to INR 225.77 crore. The details of which are given in the presentation on slide 10. Out of which the INR 216.91 crore is proposed to be distributed, resulting in a distribution of INR 3.55 per unit.
The form of distribution is INR 2.38 in the form of interest and INR 1.17 in the form of repayment, which is payable within 5 working days from the record date of August 10, 2026. Thank you, and we are open to questions now.
Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on 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 comes from the line of Sarvesh Gupta, Maximal Capital. Please go ahead.
Yeah. Good afternoon, sir, and thank you for the opportunity. First question is, last quarter, I think last time we declared the NAV, it was INR 116.8 or something, and that was pre the Q4 DPU. It would have fallen. I wanted to know if you have a management estimate of the current NAV as on June 30th after the fundraise, and how much did it increase because of the fundraising?
Yeah. Hi, Sarvesh. I think as per the management expectations, it should be around INR 118.
So INR 118 is before the distribution for June 30th, right?
That's correct. Yeah.
And how much did it increase? It would have increased by a few, for one rupee or something because of the fundraise.
Yeah, it has. It has increased by almost. Just check. I think when the-
Yeah.
After distribution, it had fallen to around INR 113.31 because we had distributed INR 3.5 in the last quarter. So INR 116.81 became INR 113.31. Then it went up to INR 116.71 and post QIP it went up to around INR 118.
Okay. Understood. This ULCCS asset, whom did you guys acquire this asset from, and at what sort of IRR?
IRR in the range of around 13.5%-14%, and this was acquired from a labor credit cooperative society. Its name is ULCCS, Uralungal Labour Contract Co-operative Society.
This 13.5%- 14% is the equity IRR, right?
Yeah.
What is the incremental cost of borrowing that you have done for acquisitions and for the refinancing of the debt at the SPV level, which were acquired?
That was in the range of around 7.15%-7.20% .
Both for refinancing and acquisition debt.
Acquisition, we did not take any because we raised QIP for doing the acquisition. The refinancing debt cost, I am telling you, that was in the range of 7.15%-7.20% .
Okay. On the DPU, we have distributed 3.55 for this quarter.
Yeah, announced to distribute. We have announced, not yet distributed.
Yeah. Announced. Yes. Now if we annualize that, can we assume at least 14.2 for this year? What would be the mix in terms of the capital return and interest?
See, we had given guidance of around INR 14 in the last quarters or rather the full year's earnings call. We will stick to that. Anything over and above that we will see. That we will get to know by Q3, Q4. But I think we are very much in the range of what we have given the guidance. Even the one thing you also have to just take into cognizance that now this INR 14 or whatever the guidance we have given on the expanded capital. That itself basically will entail a higher outlay in terms of an overall cash outflow.
Okay. In general, how is the environment for acquisition from third-party assets, and how much more are we planning to acquire from the sponsor for this year, number one, and what is the environment like? Because right now what is happening is there are so many road InvITs being set up. Every month we are hearing some new InvIT which is getting set up, both in private and public space.
Yeah
There is obviously a lot of demand also for them to acquire these operational assets, especially the HAM ones. How do you see that acquisition environment and is there anything which helps us to sort of do it better than others? On the sponsor side, how is the pipeline looking like for this year and next year?
Sponsor side, I think pipeline remains robust. Not sponsor, but from GR. Sponsor is Aadharshila Infratech Private Limited. They don't have any asset to sell. From GRIL, there is a loan. We are targeting five to six assets acquisition by this year end. On a non-GR, basically, yes, environment has been competitive. For the last one or two years, I'd say environment has been competitive. As you rightly said, a lot of new players. Everybody is chasing the same asset, right? That is also working or maybe resulting into a more compressed IRR in terms of for a resulting year, a more compressed resulting IRR for any input. But I think we've seen pockets opportunity because the market is large, there's opportunity for everyone.
But yes, we see opportunity in pockets for the quality assets, and that we need to be very vigilant and use our technical ability, which we have, backed by GR. Of course, the third party evaluation we do with the help of third party consultants, so that we don't get caught on the wrong side in terms of assessment of the asset technically. Basically what we just said on the call, right? That we have to be very careful about what exactly things we are picking up in terms of so that it remains equity accretive. Environment, just to sum it up, yes, environment is competitive, but yeah, in the pockets, we see opportunity. We are evaluating third party assets because in the third party, five assets we have signed SPAs. Three are acquired too and we are targeting some on this quarter itself.
But we are also evaluating third party assets. There are a couple of institutions are there, and hopefully we'll see how we are able to close it, say, maybe by fiscal year 2027.
Okay. One final question on the. Recently, again, we've seen some news items where a very recent opened road asset was found to be sub-quality, some substandard in parts of it. One concern is also there with regard to, let's say, the future spend that is required to keep these roads in good quality. Especially because earlier also there was a lot of competition also from many smaller players and there was a concern at NHAI level also that the roads being constructed are not of good quality, and that is why I think they have tightened some of these adjusted network norms and other norms, et cetera.
So now that since we will be acquiring all these roads from that vintage, basically newly operational roads, are we up for surprises in terms of the maintenance spend which is required for these assets and on both ROFO and non-ROFO assets, and how do we look into that risk for us?
No, I think, I can't rule out any possibility of, say, some negative kind of surprises, because it's not that roads are at the end of the day, roads. Whatever good quality you'd have been built with, nobody can predict that nothing is going to come, say, in the next 14 years, 15 years. You do your diligence properly and be very much sure that what you're going to buy actually is as per what you think, and you don't get caught on the wrong side. But at the same time, can we be 100% sure? No. Answer is no, we can't be. Look, at the end of the day, this is a business, and business is run with some risk. It can't be foolproof. Now, coming back to how we are trying to mitigate.
Of course, for all the ROFO assets, even for the non-ROFO assets also, like for ULCCS, we have done a back-to-back with ULCCS only at a fixed and fixed price. Okay? That is a quality asset, one of the best asset I would say in my portfolio till date. But again, we did a back-to-back with ULCCS so that there's a fixed time, fixed price. So we're trying to mitigate that thing so that there's no, say, for example, implication on our cash flow. But eventually, anything can happen. Say, if a road, because of any major calamity, if anything happen, you also have some kind of insurance cover. You can do that. You may have to spend first. You get your claims, you have to restore it. But the thing is, good part in the HAM conversion is annuities keep coming on time.
They don't stop the annuity subject to you restoring the asset. So there are risks, but yeah, how you are mitigating those risks, that's something you need to be very careful about. And those are basically things we are taking care of by getting into a fixed time, by having a proper insurance, by not going into a very difficult terrain, or maybe the terrain also difficult terrain also, but analyzing the risk, quantifying the risk, mitigating it properly. Those things you keep doing. Maybe being more proactive on the O&M bit. There are a lot of AIs have come. We are doing some kind of check so that things might get worse here. One or two year down the line, do some proactive things upfront so that it doesn't go down that route. So I think there are a lot of ways we are trying to do it.
But if I can tell you that anything is foolproof, there is nothing going to happen on our road for the next 15 years, answer is no. Yes, we have to be affirmed some kind of negative surprises too.
But mostly you are into fixed price, so basically, you know the absolute expense which will be required.
Yeah. Till date, all the 15 assets which are there in our portfolio, they are a fixed price contract.
Okay, great. That's it for now.
Sure. Yeah.
Thank you. A reminder to all the participants that you must press Star and One to ask a question. Next question comes from the line of Nishant Garg with Edelweiss Mutual Fund. Please go ahead.
Hi, sir. Audible to you?
Yes, yes. Hi, sir. Please go ahead.
Yeah. Thanks for giving me the opportunity. My first question is, as I can see, your net debt to AUM currently stands at 34%. At what level you are comfortable to run the business? At what level of debt? Another question to the extension to your previous answers is that you will be able to add six assets by fiscal year 2027. So at what valuation you will be adding, what is the IRR, what will be the size, and will you require any further capital raise on that?
I had said around five to six ROFO assets. Could be five, could be six, because different assets are at a different thing. You have received PCOD, but not the full PCOD. That's why I'm saying maybe five to six. Those five to six assets, if I say, put together EV will be around, say, INR 5,200 crore of those five to six assets or maybe six assets. If five, of course, the number will be lesser with a debt to equity mix of around, say, INR 3,200- INR 2,000 crore equity. As of now, if the thing goes as per what we think, because you have a lot of NHAI approvals, there are a lot of technical things you need to get it transferred, then NHAI gives you NOC.
If all those conditions precedent, CPs, other transitions say, fall in place as per the timeline what we are thinking, it may happen that we may have to raise some more equity. Amount I won't tell you now because we also have some internal cash accruals also. So how much we can use for those acquisitions, that also we'll just try to see. But yeah, we may have to do some fundraise towards the back end. But currently, as you see, we are very decently placed. In terms of debt to AUM, generally you don't see net, we see gross. Gross basis, we are around 48%. That is also because of something, INR 500-INR 600 crore repayment which we could not do. Well, we did and it's technically, it is still showing on our balance sheet. Otherwise, that 48% is in the range of around 43%-44%.
We are at 43%-44% and I think we have been maintaining it that we don't want to cross, say, maybe 88%-90% of that 70% threshold ceiling what we have. So we want to play somewhere around, say with 45%-50% to 60%-62%-63%. When you touch, you are approaching 62%-63%, again, do the fundraise, come back to 45%-50%. So that's the threshold you want to play around with.
Understood. Thank you. Thank you for the answers. That will be all.
Thank you. A reminder to all the participants that you must press Star and One to ask a question. Next question comes from the line of Deep Bhakta with Pantomath AMC. Please go ahead.
Hi, sir. Am I audible?
Yes. Hi, Deep. Yes, you are very much audible.
Yeah, Amit here. Congratulations on a good set of results. Only two questions. There were some new norms that have come in some consultation paper that MMR is not to be deducted while calculating NDCF. I think earlier, even though it was funded through debt, it used to be deducted. Does this really have a material impact on the distribution of NDCF? Can you throw some light?
Yes, I think this is for the debt. You can avail debt, right, and you can to do that MMR. That's a new consultation paper. Now if you use available new debt to do the MMR, of course that will not be considered for NDCF. That in a way is taking care of that.
Sir, earlier also this used to happen, right? I mean Hello?
No. Earlier debt was only allowed for acquisition, right?
Okay.
Now they have allowed for the MMR to do the MMR also.
Got it. Sir, one thing, I think there has been some rules or something around introduction of depository receipts of InvIT to be listed on foreign exchanges to attract foreign capital. Your views around this or what market chatter are you hearing on this point?
I think this is two new things where we would have any chatter with anybody now. I don't think they're discussing this. I think this is more future perspective. I don't think there's any serious chatter around this.
Got it. Sir, what will be the latest cash reserve as on date, June end?
I think that's there in the consolidated financials. There's a consolidated sheet. Yes, it's there.
Okay. Thank you, sir. All the best.
Thank you. Yeah.
Thank you. A reminder to all the participants that you must press Star and One to ask a question. Once again, a reminder to all the participants that you must press Star and One to ask a question. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to Mr. Amit Kumar Singh for closing comments.
Yeah, thanks, Renju. We truly appreciate our unitholders' continued engagement, support, and confidence in our trust. Anything which we get to know or any update, we will keep all our unitholders posted. Thank you everyone. Have a good day. Thanks.
Thank you. On behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us. You may now disconnect your lines.