# 1. Financial Performance ## A. Key Figures * NAV: 72.3 per unit (total) · 65.4 per unit (existing portfolio) · 85.1 per unit (acquired assets) * DPU (Q3 FY26): ₹2.34 per unit (₹1.45 quarterly + ₹0.89 interim) * **Cumulative Distributions:** **₹33** per unit since IPO · **₹976 Cr** total returned * **Standalone EBITDA:** **₹128 Cr** (Q3 FY26) · **Net Profit:** **₹85 Cr** (pre-exceptional) * **Consolidated Total Income:** **₹182 Cr** (Q3 FY26) · **EBITDA:** **₹48 Cr** · **Net Profit:** **₹11 Cr** * Debt (Mar-End): ₹2,980 Cr total · Effective Interest Rate: 7.35% p.a. ## B. Revenue & Income * **NAV Dynamics:** Total NAV reflects dilution from recent acquisitions, while existing portfolio maintains higher intrinsic value. * **Capital Allocation:** Equity raise of **₹345 Cr** used to repay debt, providing balance sheet flexibility and supporting NAV stability. ## C. DPU & Distributions * **Distribution Structure:** Q3 payout of ₹34 per unit includes accounting treatment of interim amount; gross payout totaled **₹71 Cr**. * **Investor Returns:** Full-year distribution target implied **13–14% yield** for early investors; total return now exceeds **IPO price of ₹99**. * **Sustainability Watch:** DPU run rate under review amid asset base expansion, with no firm guidance on future alignment. ## D. EBITDA & Profit * **Performance Divergence:** Standalone results show strong profitability driven by **treasury and SPV income**, while consolidated EBITDA declined due to **non-recurring modification losses**. * **Tax Efficiency:** Standalone tax outflow minimal due to **tax-free SPV distributions**, with liability limited to treasury income. ## E. Debt & Leverage * **Debt Composition:** Highly structured with mixed fixed/floating rates; **₹963 Cr** at fixed 7.5%, remainder linked to PAPM and policy rates. * **Cost of Debt:** Despite high PAPM multiples, **effective interest rate of 3.5%** reflects favorable financing terms and rate linkages. --- # 2. Asset Portfolio & AUM ## A. Key Figures * **HAM Assets:** **12** operational across 8 states (847 km) * **AUM:** **₹6,733 Cr** (+57% from ₹4,282 Cr) * **NAV:** **₹72.31/unit** (+7.2% QoQ) * **Residual Concession Life:** **13 years** average (up from 11 years) ## B. HAM Asset Portfolio * **Stable Cash Flow Profile:** Portfolio dominated by HAM assets under the new tax regime, ensuring **minimal tax burden on dividends** and enhancing distribution visibility. * **Portfolio Quality & Longevity:** High-quality, operational assets with extended concession life support long-term yield stability and de-risked income streams. ## C. AUM Growth * **Accretive Expansion:** Recent acquisitions added immediately cash flow accretive assets, driving strong AUM growth and NAV uplift. * **Future Upside Embedded:** NAV excludes a **fully protected GST CIL indemnity claim of ₹6 Cr**, expected to be realized through Q2 FY28, providing potential near-term upside. ## D. Residual Concession Life * **Enhanced Duration & Planning:** Increased average residual life to 13 years supports long-horizon asset management, with structured **two-cycle maintenance plan** over 15-year concessions. --- # 3. Cash Flow & Yield ## A. Key Figures * **Annuity Receipts:** **₹347 Cr** received in the quarter (5 payments) * **Traffic Volume:** **28 lakh vehicles/month** (+16%) ## B. Annuity Receipts * **Full Collection on Schedule:** All **5 annuities due** in the quarter were received on time, with all project assets operational and performing as expected. * **Timing Shift Impacts Distribution:** Interim distribution funded by an annuity received in January that was due pre-December, resulting in a timing mismatch for year-end accounting. * **Near-Term Receipts Pending:** One semi-annual annuity received; **two remaining annuities** are outstanding and expected in coming months. ## C. Cash Yield Guidance * **Structural Cash Flow Advantage:** Trust maintains sector-leading positioning due to **recurring annuity-driven cash flows**, supporting high visibility on long-term distributions. * **Conservative Yield Estimate:** Current **11% to 12% yield guidance** excludes recoverable GST CIL amounts pending NHAI approval, suggesting potential upside if realized. ## D. Indemnity Recoveries * **Sponsor-Backed Claims in Pipeline:** **₹6 Cr** in unapproved GST CIL from legacy SPVs is fully indemnified; claims to be filed within the next 12 months. --- # 4. Capital Allocation ## A. Key Figures * **Equity Raises:** **₹345 Cr** preferential issue · **₹1,250 Cr** QIP * **Debt Activity:** **₹420 Cr** prepayment · **₹1,100 Cr** fresh borrowings (85% PAPM) · **₹933 Cr** refinancing (85% PAPM) * **Leverage Metrics:** Target **45–47%** net debt-to-AUM · Path to **70%** post-June 2026 with unitholder approval ## B. Equity Raises * **Capital Deployment Completed:** QIP and preferential issue proceeds fully utilized—QIP funds now deployed for **3 ROFO asset acquisitions**, while preferential funds repaid Trust debt by December 2025. * **Future Equity Plans:** Additional capital to be raised for upcoming acquisitions; timing and size contingent on execution of **binding term sheets** for ROFO or third-party assets. * **Strategic Flexibility:** Leverage capacity can expand to **70%** post-June 2026 after six distributions, subject to unitholder consent and portfolio reassessment. ## C. Debt Refinancing * **Active Liability Management:** Refinanced ₹933 Cr debentures at **85% PAPM**, reducing net debt-to-EV to **34% in Q3** and expected effective interest rate from 82% to **35% by March**, yielding **47 bps annual savings**. * **Funding Mix Optimization:** Fresh ₹1,100 Cr floating-rate loan (85% PAPM) secured in January to finance ROFO buys; existing NCDs partially rolled into term loans with **₹250 Cr retained** post put-call exercise. ## D. Leverage Targets * **Stable Capital Structure:** Medium-term target of **45–47%** net debt-to-AUM maintained for current 12-asset portfolio, supporting distribution stability and free cash flow. * **Acquisition-Driven Flexibility:** Leverage ceiling of **70%** available for new acquisitions, with post-acquisition strategy to be reassessed, ensuring alignment with unitholder interests. ## E. D * **Funding Stability:** Long-term capital structure supported by **2-year average debt tenure**, reinforcing predictability in funding and distributions. --- # 5. Acquisitions & Pipeline ## A. Key Figures * ROFO Assets Acquired: 3 (9.3% discount to Aug-25 EV) * **Acquisition Pipeline:** **7 ROFO assets** expected by FY27 · **7 more by H1 FY29** * **Third-Party Target:** **2–3 acquisitions** by FY27 * Government Road Allocation: ₹3.09 lakh Cr (Union Budget) · ₹3.45 lakh Cr in NHAI bids (72% HAM) * **HAM Projects to COD/PCOD:** **>150** in next 2 years * **Debt Target for New Acquisitions:** **55–60%** (vs. current 45%) * NAV Accretion: +7.2% to ₹72.31 post recent acquisitions ## B. ROFO Assets * **Value-Accretive Execution:** Strong Q3 driven by disciplined acquisition strategy, with three ROFO assets now fully operational and annuity receipts already flowing. * **Robust Forward Pipeline:** Sponsor’s development pipeline aligns tightly with Trust’s growth targets, supporting **5–7 total acquisitions by FY27**, including near-term readiness of **two assets by year-end**. * **Favorable Sector Tailwinds:** Surge in HAM bidding activity and record government allocation reinforce a deep, sustainable acquisition funnel. ## C. Third-Party Deals * **Strategic Expansion Beyond ROFO:** Active screening of third-party HAM assets underway, targeting **5–12% IRR** net of unitholder-level taxes, with sponsor oversight to ensure platform consistency. * **Capital Efficiency Focus:** Higher targeted debt (55–60%) for new deals improves return profile, while rigorous due diligence emphasizes construction quality and long-term O&M risk (13–15 years). ## D. Due Diligence Progress * **IRR Resilience Assumption:** Target returns are anchored to RBI rate-linked cash flows, with expectations of stable or rising rates enhancing future yield visibility. * **Disciplined Valuation Approach:** While past 9–10% discounts are not guaranteed, management remains committed to accretive deals that enhance long-term value. --- # 6. Risks & Sector Factors ## A. NHAI Claim Delays * **Portfolio Resilience:** Road assets remain in **good condition** with smooth ride quality, as verified by NHAI’s independent engineer inspections across all **12 projects**. * **Stable Concessions:** Operations unaffected due to long-term concession agreements and ongoing NHAI monitoring, ensuring compliance and quality oversight. * **Claims Overhang:** Majority of **₹600 Cr** in disclosed claims still pending resolution; discussions ongoing with sponsor and NHAI to close outstanding issues. --- # 7. Guidance & Outlook ## A. Key Figures * **FY26 Cash Yield Guidance:** **11%–12%** (normalized run rate) * **AUM Target:** **₹9,000–10,000 Cr** (medium-term) from current **₹6,733 Cr** * **Asset Expansion Plan:** Add **4 to 7 assets** to reach **17 assets** by next FY * Capital Raising Reference Points: IPO at ₹99/unit, follow-on at ₹79.50/unit, QIP at ₹72.3/unit ## B. Cash Yield & Payout Strategy * **Normalized Yield Outlook:** FY26 cash yield guidance set at **11%–12%**, reflecting sustainable annuity flows, down from elevated FY25 levels supported by IPO reserves. * **Forward-Looking Flexibility:** Potential **upside to yield** exists upon receipt of future indemnity recoveries, which are not yet factored into current guidance. * **Revised Benchmarking Framework:** Starting FY27, cash yield will be measured against **weighted average cost of capital**, not IPO price, to reflect capital structure evolution. ## C. Portfolio & AUM Growth Trajectory * **Ambitious Scaling Plan:** Targeting **strong double-digit AUM growth** over the next 12 months via acquisition of third-party HAM-based road assets to boost annuity inflows. * **Structural Growth Drivers:** Management expects a **structurally stronger growth phase** driven by optimized leverage, lower borrowing costs, and immediate accretion from new assets. * **Confidence in Execution:** Reiterated confidence in achieving near-term AUM and asset count targets, with fresh guidance expected in March 2026.