IRB Infrastructure to sell Pathankot-Amritsar toll unit to InvIT Fund

India-based IRB Infrastructure's board of directors has given approval to sell its special purpose vehicle for a road project to the recently launched company-promoted investment division, InvIT Fund.  

This move is expected to double the size of InvIT over the next three-four years, reported Financial Express.

IRB Infrastructure to sell Pathankot-Amritsar toll unit to InvIT Fund At a meeting held earlier this week, the IRB Infrastructure board gave its approval to sell its special purpose vehicle managing Pathankot-Amritsar project to InvIT. 

This addition to the road project to the trust is subject to approval of the regulatory authorities.

IRB Infrastructure chairman and managing director Virendra D Mhaiskar said. "If everything goes well, we expect to complete the transaction by the end of next quarter." 

In May, IRB Infrastructure became the first road builder to list its investment trust on the India stock exchange.

The trust already has six toll-road projects, with each of them under a separate special purpose vehicle (SPV). These SPVs include IDAA Infrastructure Pvt Ltd, IRB Surat-Dahisar Tollway Private Ltd, IRB Talegaon Amravati Tollway Pvt Ltd, IRB Jaipur Deoli Tollway Pvt Ltd, IRB Tumkur Chitradurga Tollway Pvt Ltd and MVR Infrastructure and Tollways Pvt Ltd.

IRB Infrastructure's board of directors have now given approval to sell its 100% equity in SPV, IRB Pathankot-Amritsar Toll Road Pvt Ltd to the IRB InvIT Fund. 

It is expected that that the increase in yield for InvIT shareholders will be between 75 and 100 points from around the current 11%.

IRB Pathankot Amritsar Toll Road Pvt Ltd manages the Pathankot-Amritsar section of NH-15 in the north Indian state of Punjab. This SPV carries an enterprise value of around Rs15.5bn ($242m) and debt of around Rs9.2bn ($142m).

It contributed 2% to consolidated total income of IRB Infrastructure in the previous fiscal year.