Ladies and gentlemen, good day and welcome to the Indus Infra Trust Q3 FY 2025 Earnings Conference Call. As a reminder, all participants line will be in 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 touchtone 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, sir.
Thanks, Sijil. Hi, and a very good afternoon, everyone. At the outset, on behalf of Indus Infra Trust and GR Highways Investment Manager Private Limited, I welcome you all to the third quarter of FY 2025 earnings conference call of the Indus Infra Trust. I would like to take this moment to inform all of you that as per regulators' advisory, we have changed name of our InvIT from Bharat Highways InvIT to Indus Infra Trust. The name Indus Infra Trust embodies our continuous commitment to comprehensive infrastructure development across India and leveraging the opportunities in the Indian infrastructure sector. You all must be wondering why the name as Indus Infra. The term Indus resonates pretty well with our rich heritage of connectivity and economic progress, and also mirrors our mission to drive infrastructure advancement with sustainability and innovation at its core.
I will now take you through operational highlights of the trust for the quarter, followed by financial highlights, and at the end, we will move on to the Q&A session. As of December 31, 2024, the Trust had eight HAM road assets with an average balance of approx 11.4 years. For the same period, the outstanding annuities of the project SPV stood at INR 6,729 crores, and 53 of the total 240 annuities have been received on time. An update on the acquisitions front. We continue to evaluate the ROFO as well as third-party assets. We have received one proposal from GR Infra to acquire one of their HAM assets, and we have already initiated our necessary diligence on that. We will keep you all informed with respect to those acquisition developments.
If we get into our financial performance, we have successfully optimized our operational efficiency and have maintained a robust financial position with our current leverages at around 27%. This reflects our commitment of creating a long-term value for our investors. The board of directors of the investor manager in yesterday's board meeting approved a DPU of INR 2.75 for Q3 FY 2025, further broken into interest and dividend. Interest of INR 2.51 per unit and dividend of INR 0.24 per unit. Including the current announced DPU of INR 2.75 per unit, our cumulative DPU at the end of the third quarter stands at INR 11.95 per unit. I am very pleased to inform you that we have already surpassed the guidance given at the time of listing of our InvIT in the nine months itself.
Also, a quick update on the road sector cumulative award for the year 2025 to date, that is up to December 31, 2024, is 3,100 km, and cumulative construction for the same period is 5,853 km. The Ministry of Road Transport and Highways has incurred almost INR 2,25,000 crores till December 2024. The budgetary support for the roads and highway sector has grown almost eight times in the last decade, and allocation grew at a CAGR of almost 22% following the announcement of Bharatmala Pariyojana. With the same enthusiasm, we also expect the center to increase the allocation for the sector in the coming budget to reaffirming its commitment to NIP, which is National Infrastructure Pipeline. It is my firm belief that InvITs are expected to play a greater role to garner private capital for the development of national highways in the short as well as medium and long term.
If we say as per the industry reports, the assets under management of road sector of InvITs is expected to rise from INR 1.9 trillion, which is almost INR 1,90,000 crores in September 2024 to INR 3.2 trillion, which is INR 3,20,000 crores by March 2026. So there is a huge opportunity available for the InvITs to acquire road assets which are set to become operational in the next two to three years. And we, as Indus Infra Trust, strive to add a decent chunk of high-quality road infrastructure projects to our portfolio. As we move forward, Indus Infra Trust remains steadfast in its mission to contribute to nation's infrastructure growth while delivering a growing and steady returns to our unit holders. Our strategic rebranding, our healthy balance sheet, our ROFO and non-ROFO asset pipeline and the immense opportunity we see around positions us for a sustained success in the years to come.
Now, without taking much of your time, I will now pass it on to Harshael, who will take you through the financial details before we open up for questions. Thank you. Over to you, Harshael.
Thanks, Amit. Coming to Q3 FY 2025 performance on a standalone basis, the interest income on the loan extended by the trust to the SPVs was approximately INR 179 crores as against INR 147.8 odd crores in quarter two FY 2025. The increase in the interest income was on account of acquisition of Aligarh-Kanpur project, which contributed around INR 34.8 crores during the quarter as against a contribution of INR 3 crores during the second quarter. Our dividend received during the quarter from SPVs was INR 26.75 crores, which was utilized for distribution during the last quarter. Further, on the EBITDA front, EBITDA for the quarter was around INR 204.81 crores, adjusted for the diminution in value of investment.
The diminution was on account of difference between the fair value and book value of investment, and primarily was on account of the amount of cash which was upstreamed by the SPV. The total external borrowing at the trust level stands at INR 1,789 crores, and the interest cost on the same was around INR 37 crores during the quarter. The increase in interest cost by approximately INR 12.8 crores was on account of additional borrowing availed for refinancing of external debt of Aligarh-Kanpur during the month of September 2024. With respect to the tax outflows, our tax outflows on the other income, which is owned by the trust at the rate of 42.74%. On a consolidated basis, the total income for the quarter was INR 224.5 crores, consisting of INR 210 crores of revenue from operations and other income of around INR 14 odd crores.
The increase in the total income was primarily on account of increase in finance income on account of acquisition of Aligarh-Kanpur project. The EBITDA for the period was around INR 163 crores. In relation to NDCF at the trust level, the project SPVs have declared a dividend amounting to INR 17.1 crores for Q3 FY 2025, and interest income received for the quarter was around INR 179 odd crores, resulting in total cash upstream to the InvIT of around INR 196 crores. Post adjusting for finance cost, debt and trust level expenses, which is given on slide eight of the presentation, the NDCF works out to INR 122.69 crores. As was mentioned earlier, the board has made a declaration of distribution of INR 2.75 per unit, breakup of which comprise of INR 2.51 in the form of interest and INR 0.24 in the form of dividend.
As per the recent amendment in SEBI InvIT regulation, the distribution has to be made within five working days from the record date. The record date for this particular distribution will be February 3rd, 2025. That is Monday. Thank you, and we are open to questions now.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one 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 Arya Mehta from Maximal Capital. Please go ahead.
Good afternoon. Sir, of this INR 9.2 which has been distributed, I think some portion would be attributed to March 2024 month also, right? So for this year, how much should we factor in as distributed for this year for the nine months?
See, actually, for March, because we got listed on the 12th of March, right? If you see in our calculation, what we see that basically we haven't started enjoying or using the capital on March 12, 2024 onwards. So we see from that March 12, 2024 onwards till December 31, 2024, which is nine months and maybe a tad above nine months. Basically, we have distributed already or we have announced to distribute already INR 11.95, which is of course, was higher than the guidance what we had given at time of InvIT. For the quarter, which is one quarter pending, of course, we need to see how much basically SPV streams, how much we are going to receive in the form of interest, and then we'll decide, because there may be other expenses also with respect to acquisitions and all.
That we'll see and then maybe we'll decide and formalize it post the end of the quarter.
Yeah. If we annualize the thing including, let's say two-third of March, then it is coming to around INR 11.4. That's a fair assumption, right, for that year?
Yeah. I think the guidance was 11. Even if you see it that way, the guidance was 11.5, and maybe for the nine months itself, 11.4 is done already, right?
No, 11.4 is the annualized number if we take into account 20 odd days for March.
You are saying that maybe 20 days of March you set aside and then do 11.95 for the nine months? I think the annualized number will be more. Not 11.4. Because March was only 20 days odd, right? Then we have nine months, and we already got 11.95. It is like nine months, 20 days, if we are getting 11.95 annualized, even if you take the 20 days aside, I think that definitely is going to be more than 11.4.
Okay. That is one. Sir, can we any guidance on what we can do next year in terms of distribution?
See, the guidance what we had given at the time of IPO which was I think 11 and a half, right? We still do that guidance. I am not changing that guidance as of now.
How much more AUM can we expect to add in this financial year and next financial year as things stand now?
See, as I mentioned in my call, there is one proposal which we have already received from GR for one of their HAM asset.
I think there we have already started our diligence and only thing is that as per InvIT, you take asset only once its revenue generation crosses one year, revenue generation history. The second annuity of that asset is expected around first half of April. So definitely we are going to acquire that asset during the month of April, which we had thought that we may acquire in March itself. We have already applied. I think the NHAI NOC and lender NOC has already been applied by GR. So that should be on time. But I think with the six, seven days here and there, I think that March may become the first half of April. For the next year, we have almost definitely three to four assets of GR which is lined up for the acquisition.
For the non-GR assets, we will keep you guys updated as we move forward in that range. I think we can say safely for the next year, four to five assets acquisition of GR. Non-GR, we will let you know once we significantly move ahead in those directions.
Each of these assets, we should assume INR 700 crore-INR 800 crore of AUM addition?
AUM addition is, you can say on a ballpark basis, average maybe INR 600 crore-INR 800 crore odd in terms of AUM.
Yes.
Because all these assets are north of INR 1,000 crore, but it is like 40% NHAI and it is only 60% what you have to do, right? I think, yes, you can say safely on the safer side, INR 600 crore-INR 700 crore. Yeah.
Okay. In terms of our debt to AUM, where do we stand now? Have we been able to reduce the debt cost in these three months?
See, debt to AUM, I had mentioned it. Right now, currently as we speak, it stands at around 27%. Debt cost we could not reduce because the borrowing what we did was at InvIT level was linked to repo. You see, right, in the last one year, repo is not changed. RBI has kept it same. That's why the spread was fixed and there's nothing changed so that we can go to lenders and ask for that. As of now, it remains at 8.1%, which we had borrowed. So two times we borrowed, one at the time of InvIT when we acquired asset, and second time when we bought this eighth asset of ours, which was GR Aligarh-Kanpur. But our cost is 8.1% only, which has not changed, because linked to repo and RBI has not changed that.
Okay. These are in the form of NCDs or what's the nature of the debt?
It's in the form of loan only.
Okay.
Yeah.
Understood, sir. Thank you and all the best.
Thank you. The next question is from the line of Anant Mundra from Mytemple Capital. Please go ahead.
Hello. Good afternoon, sir. Thank you for the opportunity.
Hi, Anant.
Sir, approximately INR 137 crore has been retained at the SPV level. What is that for?
Yeah. So Anant, there are current liabilities sitting in the books of the SPV. So that is why there is a retention at the SPV level to meet those obligations.
Okay. That is against current liabilities. All right.
Yeah.
Sir, by the end of this year, I think in the earlier call you had mentioned that you were looking to acquire around two assets. So one you said you already received one interest from GR Infra. This other asset was also a GR asset or a non-GR asset?
That was non-GR asset. We will be disclosing about that at the opportune time.
Okay. Sir, when it comes to non-GR assets, how would you take care of, say, the maintenance risk and the other contingent liabilities that are there on the assets? What kind of IRR would you look for when it is a non-GR asset?
See, I think there is a very defined framework. IRR, if you remember, we have been mentioning on our call that whatever yield we have created, the asset what we acquire at IRR should be at IRR which actually provides an uptick of my yield. My acquisition rather should become yield accretive with every incremental asset acquisition. Suppose we are trading at currently, say, 10.5, 11, I will try to make an acquire to IRR, of course, which is north of 11, which could be 11.5, which could be 12. So that my currently, basically, yield becomes or maybe my price becomes yield accretive. That acquisition rather becomes yield accretive. Non-GR assets, of course, we will be looking to acquire basically higher to what we are acquiring.
In terms of O&M, actually, if you see, what we are doing is that whenever we do, after giving NBO, suppose we will go ahead, there is a proper diligence. In terms of we will appoint a third-party technical consultant. First when we go, of course, we have in-house team as well, which we take, and basis that we give our non-binding. Once non-binding we will get signed. Post that, we appoint basically technical and that will be of repute, so reputed technical consultant who will give to their technical number and suppose O&M number, major maintenance number. Those numbers and then of course, because ultimately GR has to do the O&M and major maintenance to Aadharshila. So they will also do their internal numbers, right? Those numbers have to match or maybe if there is any issue, those have to reconcile.
Finally, the O&M numbers was given by the consulting or whatever GR decides is the final number. That number gets inputted in our model and then finally whatever value arrives, that value subject to, of course, the target IRR we have. We basically go and final the tool, we will do the deal at that value. This is the framework what we have. And of course, other than technical, you will do all the other, like there is tax, whether it is a DD, whether it is FD, everything will be done. Insurance, legal. So everything will be done from and generally we don't cut corners, all the big fours and all that or maybe the reputed ones are there who are doing our DDs. In terms of O&M, yes, that's the framework and we are following that framework.
Oh. So even if it's a non-GR asset, the maintenance will be managed by Aadharshila only. That understanding is correct, right, sir?
Absolutely. Aadharshila and, of course, through Aadharshila, and GR will do it.
Okay. Through Aadharshila. Okay, got it. And sir, so next year we've guided for maybe say four asset acquisitions. So where do you see the debt level reach? So debt by AUM, will we reach the 39% next year? I'm just trying to understand, when is it that we would require a next round of fund raise? When will we exhaust our limit?
I will tell you directly coming to your second part because right now I am 27 and I will take say two, three more assets, I will be at 44, 45. But in terms of my fundraise, it will be towards the latter part of the next half, which will be say September to December quarter. Because we have four assets and those four assets I think in terms of AUM will be somewhere around INR 3,000 crores. So if I do INR 3,000 crores and if I do a debt equity, say even of 60%, I will have to have INR 1,800 crores of the debt. So with INR 1,800, INR 1,800 I will be INR 3,600.
My AUM will also increase, but I think I may have to come and depending on the other GR assets also, I may have to come to the market next year depending on how I am able to conclude those acquisitions. I think maybe either third or fourth quarter of next year. That is what the timeline I think ballpark, basically tentatively what I look at.
Got it, sir. And sir, there is a recently listed competitor. So I was just looking at their cost of debt. Their cost of debt is around 7.8%, whereas we are at 8.1%. So why is there a big gap? Are the terms different for us versus them? How is there such a big difference here?
Anant, to be honest, I would not want to comment on the competition's cost of debt or competition's framework because it is not only cost of debt, a lot of things will be different. So I actually would want to focus on my performance in between my operational highlights. But one thing I can tell you is that the 13-year, 14 years loan what I am taking and the tenor what I am taking, 8.1% which is spread of 160 over the repo. I doubt that very few people in the market would have been getting that kind of rates. Of course, when I can go and do the bond I can get it to a cheaper rate which is one year, two year, three years. So you cannot compare actually a one-year, two-year bond with a 13-year loan or 14-year loan.
Okay. Got it.
Actually it is linked to repo, right? Once my repo will get, as I start so my rate will also start coming in. With 25 bps cut, I directly come down to INR 7.85.
Okay, got it.
But in the bond with the three year structure you get stuck with that pricing, right?
Yes.
A lot of valuation was done before InvIT itself. I think the pricing what we got with our thought process, our estimation of the rate cut, our estimation of the repo movement, our estimation of how U.S. is behaving, how U.S. is sneezing and India catching the cold because of that. I think with all that, we thought of going ahead with this. I still think that my pricing is one of the best pricing in the entire industry.
Got it. Sir, there are other deals also that are happening. Like Ashoka has recently sold its HAM portfolio I think to one of KKR or Macquarie or someone. I am not sure who.
Sekura.
Sekura. Okay. There are a lot of deals that are happening in the market. Typically what equity IRR are these deals happening at?
Difficult to attributing a value, Anant. We may have to check with those guys because it is all the confidential data which does not get shared in the market.
Okay. Were we not involved in these kind of discussions? Or did we try to bid for these assets or no?
No, I was. Which one you said? Of course we had bidded for that. But of course there was some valuation mismatch so that's why we couldn't go. But we were like the one who had looked at this asset, entire 11, 12 assets almost one and a half years back.
Okay. I'm just trying to understand because given the InvIT structure that we have and given our cost of capital, it will be difficult for anyone to beat that. Just want to understand where, are we very off from the market? I can't imagine why someone would not, why would an InvIT not get the deal versus someone else getting more competitively given that our structure is far, far better and more efficient.
There are a lot of reasons for that. If I'll start outlining the reasons, it will take longer. But one thing I can tell you is that if your InvIT will take any asset, of course, one thing, we would want to be very sure of the quality. Right? Because we already have eight assets from a guy who's literally a good quality player. What we do is, we benchmark that quality with every incremental asset which we plan to take. Now, what happens is that the moment you would want to compromise the quality of one asset, whatever the return you would have made on the eight or nine or 10 other assets will get equalized. That's why we are not very fancy of, say, acquiring a portfolio.
Because when you acquire a portfolio, you might get good asset, may not get so good asset also. We actually maybe do more diligence, I would say. We take more time. We remain a little conservative. We think that maybe in the long term, that conservatism will pay off more and will play out better.
Got it. Got it, sir. That explains it quite well. That's it from my end. Thank you, sir. Thanks for that.
Thank you. The next question is from the line of [Vivek Agarwal] from BV Investments. Please go ahead.
Sir, good afternoon.
Hi, Vivek Agrawal.
My question was regarding this retention of INR 100 crore. You told it is against current liability. These SPVs will have this amount of current liability, or it is earmarked for some other purpose? Why? SEBI has also told that you have to distribute 90% of your cash flows, and we are retaining a significant amount. It is like INR 3 per unit.
Vivek, there are certain prior period claims also which are received during this period and which has not been paid out yet. That is why the number is looking a bit on the higher end. Further, for the nine months period, whatever is the O&M expenditure, the billing happens on a six-monthly basis. For the nine months, the entire provision is sitting in the books. That is the reason the number is appearing a bit higher. Maybe you can see in the next quarter, Vivek. In the next quarter, this will get balanced out. This is just a timing mismatch. Yeah.
Fair enough, sir. You have done a retention of INR 60 crore or INR 59.2 crore in Q2 last quarter. That should have been reversed. It will have got distributed this quarter or that becomes cash tenure?
No, so that was towards because there was a debt service requirement in Aligarh-Kanpur where we had not received the no-due certificate from the lender. So that is why that amount was blocked. Unfortunately, it was encumbered and that has been subsequently released and that particular SPV, as I mentioned, has contributed towards the fee is not received in that particular SPV during this period, post-acquisition.
Oh, okay. So that cash has been used in that way.
Yeah.
Okay. Again, DSRA we have retained this quarter, we have not taken any fresh borrowing, and last quarter we have retained some DSRA. Again, there is some DSRA requirement or this is like some.
This is not retained, as so there is a repayment profile based on which for the ensuing three months we keep on creating DSRA. So there was a requirement. Yeah. So that is the reason why there was additional outflow required in this particular quarter.
Vivek, as of now it is only eight assets. The moment you acquire more assets, DSRA requirements may go up, down.
That I am not sure.
There shouldn't be any further DSRA unless the repayment profile changes.
Yeah.
You are saying the repayment profile would have changed and therefore you are retaining.
Okay. Going forward for under the taxability part, is there any view that you guys are taking so-
Sorry, Vivek. You were not coherent. Can you just come again?
I see.
Mr. Vivek.
How to make the distributions?
Mr. Vivek, I would request you to please use your handset.
I am using handset only. Am I better now?
Sir, your voice is breaking. We cannot hear you clearly.
No. Sorry. Leave it then. Leave it. Sorry.
No, you can try again. We are happy to maybe just give a try one more. Please ask, Vivek.
No, taxability, are you guys thinking in some way how to make the distributions more tax efficient as you go forward?
Yeah, definitely, Vivek. I know where you're coming from. Initially what happens because your SPVs and all would have the positive balance, right? So of course you basically distribute the surplus which actually gets distributed in the form of dividend and of course the interest what you're charging which goes as. But I think going forward, I think this will change definitely and then you start seeing more as a capital repayment I think which will take care of your taxability portion.
Okay. Thank you so much.
Yes, you are welcome.
Thank you. The next follow-up question is from the line of Arya Mehta from Maximal Capital. Please go ahead.
Good afternoon, sir. Just a couple of follow-ups. One is, what is the NAV right now?
I think the NAV based on the September valuation which was done was in the range of around INR 114. INR 113 or something, it was INR 113, INR 114. Yeah.
On the further acquisitions part in terms of pricing and yield accretion, just wanted some more clarity. So see, right now on the INR 11.5 sort of a distribution, you are trading at, let's say, 10% yield for the unit holders, right? Your cost of debt is 8%. Now when you acquire an asset, how are you looking at it? There are project IRRs. Are you looking at 10% project IRR, which will give us maybe 12% sort of an equity IRR because we will be acquiring using 8% debt? Or are you looking at equity IRRs itself to be 10% or maybe 10.5% in that range?
We don't look at project IRR first, we look at equity IRR only. Equity IRR, what we are looking right now, if you see take the example of the last asset acquisition, well it was from GR only. We did an acquisition and we had told also, we have mentioned on the call as well that that acquisition actually helped us to take the yield from 11.5 to almost 11.9 to around range of 11.9 to 12-ish. Almost 45, 50 bps was the yield up. Basically, yield went up because of those acquisitions. It's not that I'm right now saying, for example, I am creating a say 10.5 yield. I will do a 10.5 only. Of course, I'll strive for the best, right?
Whether it will be 11.5 , it could be 12, it could be 13, it could be 14, whatever that number. But the point what happens is that once my repo moves down, right? Comes down. Of course, I'll have some impact of that as well. Keeping that thing in mind, that's why we say that our acquisition at any point of time is going to be yield accretive. Reason being that whether even I've get 11.5 , 11.2 because we also do a lot of sensitivity as a down acquiring, right? Then how the interest rate movement will happen. Basically then overall this asset will give me how-
Interest rate movement, sir, we understand, but right now you are trading at 10%, INR 11.5 divided by 1,100, 1,300, 1,400. That is 10%. So you are looking at 10% to 10.5% sort of equity IRR or are you looking at.
No, I think just more than that. Not that.
Okay. In terms of the debt itself, any particular reason why we have taken repo-linked debt instead of maybe trying to get fixed rate long tenure debt? Because on the distribution side we have HAM assets which are basically fixed. Then there can be a mismatch between the two should the interest rates go up.
No, it is a very interesting question. I think we had at a time when we are doing the IPO, we had explained it. In a HAM asset, maybe I will just take a minute to explain to you again. HAM asset what happens is that INR 100 says the cost. Authority gives you INR 40 during construction and INR 60 authority gives you during the operation period, which is 15 years, right? Then authority also pays you interest on that INR 60. So the eight assets what we have now, they are basically authority is paying me interest on annuities which is linked to base rate. Base rate is nothing but repo plus 25 bps. So what I am getting actually the interest from authority on those outstanding annuities is at the rate of repo plus 325 bps. While what we could negotiate from lenders is-- Okay.
Why did we take link to repo? Because what I am getting from authority is linked to repo or linked to base rate which is again in terms of repo plus 325 bps . We thought that let us take loan which is underlying link to repo itself so that my inflow and outflow becomes the links gets linked to same benchmark which is repo.
Does it nullify fully? Does it nullify the impact fully?
No, it is not entire because it will nullify to the extent of my leverage. But the point is that suppose my leverage goes to 60%, 65%. My two-third of that will get nullified. Second thing is if I take a fixed in a, I do not know, we can deliberate on that, but maybe whether this is a proper time to say take something of three-year, five-year, seven-year fixed when you can see that maybe in the next, I cannot forecast, but maybe you can see that our interest rate cut down over this next three to six months.
Should we basically lock us ourselves by taking a say longer term loan or maybe we should keep it flexible and then when suppose interest rates move down and we are still reasonably say subdued interest cycle, that time we should take something which is fixed for say five years, seven years and get our outflows locked. That is our viewpoint we have taken.
Sure.
And that time we had a discussion with rating agencies, investors and they liked it. That okay, I think your inflow outflow get linked to the same. I think then what happens, it takes care of your variability.
Understood, sir. Thank you and all the best.
Yes.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Ankit from Kotak Bank. Please go ahead.
Hi. I just have two questions. One is on the incremental acquisition which you want to do from third party assets and from GR. Will the indemnity clause will remain which was there for initial assets? Because we have seen in Varanasi Sangam there was deduction in payments. So how are we taking care of it?
Yeah. The most of the clauses which were there earlier will remain as same.
For third party asset services?
Yeah.
Okay. Since we are planning to acquire four more assets, just want to check. After six distributions, we can increase our leverage to more than 49%. With this four to five acquisitions, where will be our leverage and at what leverage level we will be looking to raise another equity?
See, it depends. SEBI has floated a consultation paper where they are saying that basically you may increase your leverage from 49% to 70% if you would have completed your six quarterly distributions.
Correct.
In our case, I think we have already completed our four quarterly distributions. So with March and June we will be completing six. If that consultation paper say, I do not know, I am just saying that. If, say it gets formalized, then maybe after June itself, we should be able to raise our leverage from 49% to 70%. So in that case, I can still acquire almost INR 6,000-7,000 crores of the value of the asset without raising any equity. So I think I have given the answer of this as well. That depends what time I am acquiring what value of the asset. But if everything goes as well as planned, we may look to raise equity sometime, maybe September 2024, December or maybe March quarter next year. Not September, December or March quarter next year.
Okay. So my question was specifically, is there internal threshold that will maximize up to 60%, and after that we will go for equity raise or we can raise below that level? That was the question.
Okay. Thank you. That is from my side. Thank you. Thank you very much.
Thank you.
Sure.
A reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The next follow-up question is from the line of Anant from Mytemple Capital. Please go ahead.
Hello. Thank you for the follow-up. Sir, you just explained that how through the acquisition of one asset, our payout has actually increased from 11.5 to 11.85, 11.9. Just want to understand, assuming everything else remains the same, and we acquire new assets at the same equity IRR of about 12% that we've done for the first asset, and we leverage up to 60%, 65%. What do you think this yield that is currently at 11.8, 11.9, that can go up to?
Anant, every asset acquisition cannot be as a 12%, to be honest. Because I always maintain that it will be incremental to the yield I'm creating. First I could negotiate 12, doesn't mean that everything I'll be negotiate at 12. It could be lesser. Depending what the best I can negotiate, because when we negotiate with GR, it's like a third party complete on the arm's length basis. What finally I could negotiate with GRN could get the final rate, that will only decide basically what kind of yield I'll be. It's not that every asset acquisition we'll keep increasing 40, 50 bucks. Otherwise, then with the four asset, five asset, you will cross 40%, 50%. That is very highly unlikely case.
But yeah, as I said, I have been maintaining that whatever yield we are creating, we will ensure that my incremental asset acquisition becomes a yield accretive. But that 12% should not be taken as a benchmark.
Okay. But sir, equity IRR of 12% is not a very big ask from the 30%, because the project IRR then becomes. Shouldn't 12% be our internal benchmark as well, at least?
Anant, again, I would say that it's a function of the asset you are buying. So I agree with you that internal benchmark should be 12%. Answer is yes, it should be. But then will you get every asset at 12%? My answer is, I don't know. That's why I can't say that 12% should be, because today I may negotiate 12, tomorrow maybe it could be 11.5, could be 11.25, could be 11.75. That's why I am not saying that it should be 12. But yes, if interest rate moves down, even at 11.5, that will also become a good yield accretive. That's why I said to you that every incremental asset acquisition will be yield accretive. That we will ensure for sure.
Okay. Got it. All right. Thank you, sir.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Amit Kumar Singh for closing comments.
Thanks Sejal, and again, thanks all of you, all the unitholders for joining this call, all the investors for joining this call, and reaffirm our commitment to keep growing this platform and keep delivering the desired returns to all of unitholders. Thank you so much. Thanks.
Thank you. On behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.