Anil Ambani-led Reliance Infrastructure Ltd. will launch an initial public offer for its infrastructure investment trust to monetise its road assets in the quarter ending September.
“The company has received a SEBI (Securities and Exchange Board of India) approval for an IPO,” Lalit Jalan, chief executive officer at Reliance Infrastructure, said. Of its 11 road assets, the company plans to put seven into an InvIT fund and is looking to raise Rs 2,500 crore through the IPO, he said. By 2019, the company will add the remaining four assets into the InvIT.
InvITs are mutual-fund like instruments that pool in income-generating infrastructure projects to raise funds from investors. Two such trusts have already gone public. IRB Infrastructure Developers Ltd.'s trust was the first to list after receiving more than 8.5 times demand in the IPO. It was followed by Sterlite Power Transmission Ltd.'s India Grid InvIT, which received demand of 1.35 times the units on offer. Their units fell after listing but have since partly recovered.
After the initial poor performance of the first two InvITs, we wanted the sentiment to stabilise. Since we are seeing that happen, we will launching the IPO of our trust.Lalit Jalan, Chief Executive Officer, Reliance Infrastructure
Jalan had earlier said the company wanted to list the trust by March. It received SEBI's approval in May.
The company may also consider an InvIT for its power distribution business in Mumbai, Jalan said. The other option is to sell to an international buyers, he said. “We are trying both parallelly and would go for whatever is attractive.” The picture would be clearer by the end of this year, he said.
Key Operational Highlights
Reliance Infrastructure has emerged as one of the lowest bidders for two Rs 1,270-crore Mumbai metro projects, Jalan said. The company is yet to receive the letter of intent and a formal announcement would be made after that, he said. Reliance Infra already operates Mumbai Metro-1 between Andheri and Ghatkopar.
Jalan said the company is keen on bidding for engineering-procurement-construction road projects. For the defence sector, the company holds 51 percent in its joint venture with France's Dassault Aviation to meet Rs 30,000 crore obligations under the Indian government's deal to buy 36 Rafale fighter jets.
Key Financial Highlights
Reliance Infrastructure's consolidated net profit declined 23 percent to Rs 334 crore in the three months ended June over the year-ago period. Total consolidated income rose 4 percent to Rs 7,848 crore.
Our income from the EPC business has gone down this quarter as compared to last year but we hope this share will keep increasing the coming quarters as we will keep looking at opportunities for participating in projects across the sectors.Lalit Jalan, chief executive officer, Reliance Infrastructure
The current order book stands at Rs 5,700 crore. Jalan said the company's standalone debt is Rs 16,000 crore and a debt-to-equity ratio of 1.2:1.
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