# 1. Financial Performance ## A. Key Figures * Stand-alone Interest Income: ₹189.24 Cr Q2 FY'26 · ₹185.05 Cr Q1 FY'26 (+2.3%) * **H1 FY'26 Total Income:** **₹394.85 Cr** stand-alone · **₹139.66 Cr** consolidated * EBITDA (ex-impairment): ₹382.91 Cr stand-alone H1 · ₹189.96 Cr stand-alone Q2 * Dividend Received: **₹2.75 Cr** from SPVs (Q2 FY'26) * **Cash Reserves:** **₹530 Cr** (as of 30 Sep 2025) ## B. Revenue & Income * **Annuity Stability:** Healthy and timely annuity receipts underscore stable cash flows and operational resilience. * **Income Volatility Explained:** Consolidated income decline driven by **reduced finance income due to lower bank rates**, not operational deterioration. * **One-Time Impact Clarified:** Prior revenue reduction stemmed from **one-time release of DSRA and maintenance reserves post-refinancing**, with no recurrence in current period. ## C. EBITDA & Profit * **Strong EBITDA Trend:** EBITDA excluding impairment rose sequentially to ₹96 Cr in Q2, reflecting underlying earnings strength. ## D. Balance Sheet * **Conservative Leverage:** Portfolio of **9 operational HAM assets** supported by a low **6% leverage ratio**, enabling strategic acquisition capacity. * **Cash Deployment:** Cash reserves decreased to ₹530 Cr due to distributions and operational use, down from ₹610 Cr last quarter. --- # 2. AUM & Asset Growth ## A. Key Figures * **Acquisition Guidance FY'26:** **₹3,000 Cr** ROFO · **₹1,000–1,200 Cr** non-ROFO * **Acquisition Guidance FY'27:** **₹3,000–3,200 Cr** ROFO · **₹2,800 Cr** non-ROFO * **New Projects in AP:** **29 projects**, **272 km**, valued at **>₹5,200 Cr** * **Major Projects Pipeline:** **₹8,300 Cr** (Orissa), **₹4,447 Cr** (Bihar), **₹2,157 Cr** (Puducherry) ## B. Acquisition Pipeline * **Active Deployment:** Significant capital allocation underway across high-value greenfield and brownfield highway projects, with a focus on economic corridors and urban decongestion. * **Execution Momentum:** Third ROFO acquisition nearing close this quarter; 2–3 more expected next quarter, pending NHAI and lender NOCs. * **Governance & Transparency:** Related-party acquisitions require unitholder and board approvals, ensuring alignment and oversight. * **Strategic Positioning:** Trust is a key participant in India’s multi-trillion-rupee infrastructure cycle, with selective due diligence across ROFO and non-ROFO opportunities. ## C. ROFO vs Non-ROFO * **Balanced Mix Forward:** Acquisition strategy reflects a maturing model, with near-term pipeline split between ROFO and non-ROFO assets, favoring ROFO slightly in both FY26 and FY27. * **Investor-Led Demand:** Shift toward seasoned asset monetization driven by institutional investors seeking stable yields, reinforcing InvITs’ role as value creation vehicles. * **Incentive Framework:** No incentives drawn to date; structure remains asset-agnostic, calibrated to AUM scale post-acquisition. ## D. Future AUM Targets * **Sector Momentum:** Indian InvITs approaching **₹8 lakh crores** in AUM, underpinned by government-backed asset monetization and strong investor appetite for inflation-linked, long-duration cash flows. --- # 3. Distribution & Capital Return ## A. Key Figures * **Total DPU since Listing:** **INR20.80** per unit * **Distribution Amount:** **₹3.35** per unit (comprising interest ₹2.51, dividend ₹0.10, return of capital ₹0.74) ## B. DPU & Payout * **Consistent Capital Return:** Sustained unitholder returns highlighted by cumulative DPU of **₹80** since listing, with H1 FY'26 payout at **₹6** per unit. * **Distribution Composition:** Latest **₹35 per unit** payout structured as interest, dividend, and return of capital, fully funded from **NDCF and cash surplus** without tapping reserves. * **Payout Timing:** Record date set for **12 November 2025**, aligning with quarterly distribution schedule. ## C. NDCF Utilization * **Cash Flow Discipline:** NDCF of **₹266+ Cr** generated in H1, after absorbing **₹38+ Cr** in finance costs, **₹52+ Cr** in debt repayments, and **₹53 Cr** in statutory/reserve payments. * **Capital Structure Integrity:** Debt repayment and reserve funding executed without compromising distribution capacity or reserve balances. --- # 4. Funding & Leverage ## A. Key Figures * **Total Borrowing:** **₹2,240 Cr** at Trust level · **Interest Cost:** **₹38.31 Cr** (period) * **Finance Cost:** **₹75.85 Cr** H1 FY'26 (driven by refinancing) * **Equity Raise Plan:** **₹800–1,000 Cr** Q1 and **₹2,500–3,000 Cr** Q4 (subject to acquisitions) * Target Capital Structure: ~40% equity / 60% debt for future acquisitions ## B. Debt & Interest Cost * **Refinancing Drives Cost Increase:** Higher finance costs reflect strategic borrowing to refinance external debt for GR Aligarh and Galgalia Bahadurganj projects. * **Leverage Near Comfort Limit:** Current leverage at ~65% constrains further debt-funded growth, prompting capital structure recalibration. ## C. Equity Raise Plan * **Phased Equity Dilution Ahead:** Trust plans significant equity raises to sustain acquisition-led growth, with size and timing contingent on deal flow. ## D. Capital Structure * **Headroom Within Current Equity:** Existing equity base supports AUM expansion to ₹11,000–12,000 Cr without immediate dilution, using available leverage. * **Flexible Capital Policy:** While targeting 40/60 equity-debt mix, Trust retains option to adopt a more conservative, equity-heavy structure based on market and M&A conditions. --- # 5. Asset & Reserve Management ## A. Key Figures * SPV Cash Flow from Operations & Other Income: ₹266 Cr (total) · ₹254.6 Cr distributed (95.7%) * **Asset Value:** **₹6,737 Cr** (as of current period) vs. ₹7,036 Cr (March) * ₹3.25 Cr Q1 distribution contributed to impairment ## B. MMR & DSRA Reserves * **Conservative Reserve Policy Maintained:** Trust continues to hold MMR and DSRA cash reserves at project and SPV levels despite waiver at InvIT level, supporting financial prudence and potential for incremental cash release. * **Waiver Confirmed, Practice Unchanged:** MMR reserve requirement waived at InvIT level by lenders, but retained at SPV level per concession agreements and banker stipulations. * **Upcoming MMR Obligations:** MMR expected for Phagwara-Rupnagar in Q4 FY26 or Q1 FY27, and for Varanasi-Sangam in 2027, signaling near- to medium-term cash flow commitments. ## C. SPV Cash Upstreaming * **Reduced Dividend Flow:** Lower foreign revenue vs. H1 FY25 due to diminished SPV dividend upstreaming, as prior period benefited from release of encumbered cash post-IPO acquisitions. ## D. Impairment Drivers * **Impairment Driven by Structural Factors:** Decline in stand-alone EBITDA reflects non-cash impairment from **repo rate cuts** and **cash distributions** from finite-life, non-toll assets that lack value reset mechanisms. * **No Consolidated Impact:** Impairment is purely a result of intra-group cash upstreaming from SPVs to InvIT, with **no effect on consolidated financials** or operational asset performance. * **Distribution Reduces Book Value:** Distributions to unitholders are treated as return of capital in finite-life assets, directly reducing asset carrying value and contributing to fair value adjustments. --- # 6. Risks & Concession Terms ## A. Rate & Valuation Risk * **Valuation Discipline:** Asset valuations incorporate **full MMR reserves and future liabilities**, ensuring conservative NAV estimates. * **Acquisition Uncertainty:** NAV impact of potential **INR 6,000 Cr+ asset acquisitions via debt** remains unquantified, pending target SPV capital structures. ## B. Weather Delays * **Execution Headwinds:** **Incessant rains** have paused electrification and balance work, creating near-term schedule slippage. ## C. Reserve Requirements * **Proactive Liability Management:** Concession terms mandate reserves for major maintenance, even absent Trust-level requirements, supporting long-term financial planning. --- # 7. Guidance & Outlook ## A. Key Figures * **FY26 AUM Growth:** **₹4,000–4,500 Cr** incremental (+ROFO & non-ROFO) · **₹11,000–11,500 Cr** total by FY26 end * **FY27 AUM Target:** **₹6,500–7,000 Cr** incremental · **₹17,000–18,000 Cr** total by FY27 end * **FY27 Acquisition Guidance:** **₹6,000–6,500 Cr** in assets (ROFO + non-ROFO) ## B. FY26 AUM Growth * **Clear Upside Trajectory:** AUM expansion in FY26 driven by high-certainty asset roll-ins, including the Araria-Galgalia Package 2 under GR, with **strong visibility across both ROFO and non-ROFO pipelines**. * **Q4 Loading:** Majority of FY26 AUM addition expected in Q4, reflecting **front-loaded closing of GR and 2–3 non-GR assets**. ## C. FY27 Acquisition Plan * **Revised Timing:** Previously expected end-Q2 acquisition delayed, though **FY27 pipeline remains robust** with improved planning and broader asset coverage. * **Increased Ambition:** FY27 acquisition target reflects **higher volume and confidence** compared to prior-year execution, signaling scaling momentum. ## D. Distribution Target * **Capital Returns on Track:** Distribution guidance of ₹5 per unit remains intact, with **current payouts aligned and upside potential** supported by stable cash flows. * **Strategic Anchors:** Growth strategy underpinned by operational discipline, capital prudence, and alignment with national infrastructure priorities.