Indus Infra Trust is a SEBI-registered Infrastructure Investment Trust (InvIT) focused on the Indian road sector. The Trust functions as a yield-oriented platform, acquiring and managing operational highway assets to provide stable, long-term distributions to unitholders. With a portfolio backed by sovereign-linked counterparties and a robust acquisition pipeline, the Trust is positioned as a key vehicle for capital recycling in India’s infrastructure landscape. --- ### **Core Revenue Engine: The Hybrid Annuity Model (HAM)** The Trust’s financial stability is anchored in the **Hybrid Annuity Model (HAM)**. Unlike traditional toll roads, HAM assets eliminate traffic volume risk, providing highly predictable cash flows. * **Payment Structure:** The **National Highways Authority of India (NHAI)** pays **40%** of the completion cost during construction and the remaining **60%** as semi-annual annuities over a **15-year** operations period. * **Triple Revenue Streams:** 1. **Fixed Annuity Payments:** Semi-annual installments from NHAI. 2. **Interest Income:** Earned on the reducing balance of the completion cost, typically linked to the **RBI Bank Rate + 3.00%** or the **average one-year MCLR of top 5 commercial banks + 1.25%**. 3. **O&M Payments:** Inflation-indexed receipts from NHAI to cover maintenance costs. * **Natural Interest Rate Hedge:** Because the interest revenue from NHAI is linked to the Bank Rate/MCLR, it provides a built-in hedge against adverse interest rate movements on the Trust’s floating-rate debt. --- ### **Portfolio Composition and Asset Footprint** As of **December 31, 2025**, the Trust manages **10 operational HAM assets** spanning approximately **662 Km** (**~2,794 Lane Kms**) across six Indian states. | Metric | Value / Status | | :--- | :--- | | **Assets Under Management (AUM)** | **~₹7,177 crore** | | **Weighted Avg. Residual Concession** | **~10.85 years** | | **Credit Rating** | **AAA / Stable** (CARE, CRISIL, India Ratings) | | **Operational Status** | **100% Operational** (No construction risk) | **Key Project SPVs:** * **GPEL (Punjab):** 80.82 Km (4-lane) Phagwara-Rupnagar. * **VSEPL (Uttar Pradesh):** 72.40 Km (6-lane) Handia-Varanasi. * **GBAHPL (Bihar):** 44.98 Km (4-lane) Bahadurganj-Araria (Acquired Dec 2025). * **GAKHPL (Uttar Pradesh):** 70.98 Km (4-lane) Aligarh-Kanpur. * **PDEPL (Gujarat):** 117.75 Km (4-lane) Porbandar-Dwarka. --- ### **Strategic Growth Pipeline and Acquisition Roadmap** Growth is driven by a structured **Right of First Offer (ROFO)** agreement with **G R Infraprojects Limited (GRIL)** and opportunistic third-party acquisitions. * **The GRIL Pipeline:** The Trust holds a **5-year ROFO** on all road assets developed by GRIL. As of early 2026, the Trust is evaluating a pipeline of **18 additional assets**. * **Recent Integration (FY 2025-26):** * **GAKHPL, GGBHPL, & GBAHPL:** Successfully integrated as the first three ROFO acquisitions. * **March 2026 Expansion:** Acquired assets **GEKEPL, GUBHPL, and GBUHPL**, increasing AUM by **₹2,700.1 crore**. * **Third-Party Diversification:** In December 2025, the Trust signed agreements to acquire **100%** of **4 operational HAM projects** from **KNR Constructions Limited** (**KRGIPL, KRTIPL, KGIPL, KPIPL**), reducing dependency on a single developer. --- ### **Financial Performance and Capital Management** The Trust maintains a high-grade credit profile and a disciplined approach to leverage. **Consolidated Financial Position (as of Sept 30, 2025):** * **Enterprise Value (EV):** **₹6,063.80 crore** (Adjusted EV: **₹6,737.20 crore**). * **Net Asset Value (NAV):** **₹112.60 per unit**. * **Net Debt / EV:** **~20%** (Significant headroom against the **49%** regulatory limit). * **Liquidity:** Maintains a **Debt Service Reserve Account (DSRA)** of **₹136.79 crore**, covering one quarter of debt servicing. **Distribution Track Record:** The Trust has consistently met or exceeded its IPO guidance of **₹11.50 per unit** for FY25. | Period | Total Distribution (per unit) | Composition Highlights | | :--- | :--- | :--- | | **Q1 FY26** | **₹3.25** | Primarily Interest Income | | **Q2 FY26** | **₹3.35** | Mix of Interest and Capital Return | | **Q3 FY26** | **₹3.40** | High Capital Repayment component | **Financing Strategy:** In February 2026, unitholders approved increasing the borrowing limit to **70%** of asset value to fund the eight-asset acquisition pipeline. To support this, the Trust secured a **₹1,940 crore** term loan from **HDFC Bank** in March 2026. --- ### **Operational Framework and Maintenance Strategy** The Trust utilizes a specialized management structure to mitigate technical and operational risks: * **Investment Manager:** GR Highways Investment Manager Private Limited (GHIMPL). * **Project Manager:** Aadharshila Infratech Private Limited (AIPL). * **O&M Execution:** SPVs enter into fixed-price **Operations & Maintenance (O&M)** and **Major Maintenance (MM)** contracts with AIPL, which are back-to-back sub-contracted to **GRIL**. * **Cost Management:** Routine O&M costs are escalated at **~4.5% to 5% p.a.** Major Maintenance cycles for newer assets are forecasted to begin around **FY31**, with provisions made based on technical due diligence. --- ### **Risk Profile and Mitigation** | Risk Category | Impact & Context | Mitigation Strategy | | :--- | :--- | :--- | | **Counterparty** | Dependence on NHAI for 100% of revenue. | NHAI is a sovereign-linked statutory body; credit risk is minimal. | | **Interest Rate** | Floating rate debt can impact DSCR. | Natural hedge via NHAI interest linked to Bank Rate/MCLR. | | **Regulatory/Tax** | GST on road construction increased from 12% to 18%. | Treated as a **Change in Law (CIL)**; NHAI has already approved CIL rates for 5 SPVs. | | **Maintenance** | Unforeseen weather or climate events. | Fixed-price contracts with GRIL, an experienced EPC player. | | **Cash Flow Trap** | Regulatory requirement if DSCR falls. | If **DSCR < 1.10x**, surplus cash is trapped at the InvIT level to protect lenders. | **Legal and Contingent Liabilities:** * **Tax Disputes:** The Trust reported **₹1,067.63 million** in indirect tax matters as of March 2025. Notably, a **₹128.26 crore** GST dispute for the Porbandar Dwarka asset was settled in favor of the SPV in October 2024. * **Indemnity:** All tax litigations prior to asset acquisition are covered by an **8-year indemnity** from the Settlor (**GRIL**). * **Sponsor Investigation:** The Sponsor (GRIL) is involved in a **CBI investigation** regarding alleged bribery; however, proceedings were stayed by the **Guwahati High Court** in December 2024. --- ### **Market Outlook** The Trust is positioned to benefit from the **National Monetization Pipeline (NMP) 2.0**, which is expected to offer **₹3-3.5 lakh crore** in road asset opportunities over the next 5-6 years. With the Indian road InvIT sector projected to reach an AUM of **₹3.2 trillion** by March 2026, Indus Infra Trust’s **AAA rating** and established acquisition framework provide a competitive edge in consolidating high-quality operational assets.