IRB InvIT Fund Forensic Report - SOIC x StockScans Report

as of Jul 2026

IRB InvIT’s record is built on a single, stable business, toll collection across India, and operating cash flow has covered reported profit in every year since FY21. Three things demand attention: the Trust doubled its project portfolio in FY26 through large, debt-funded acquisitions from its Sponsor and a Sponsor-controlled private InvIT; it is enmeshed in extensive litigation with NHAI and tax authorities, including a ₹3,108 crore claim, yet reports zero contingent liabilities; and standalone impairment provisions on three SPV investments exist while consolidated intangible assets carry no impairment.

Key findings

  1. The InvIT expanded its portfolio through debt-funded Sponsor acquisitions, adding twelve subsidiaries Major - The Trust held seven subsidiaries in FY20 and FY21, eight in FY24 and FY25, and twelve in FY26. On 1 November 2025 it acquired three BOT projects from IRB Infrastructure Trust (Private InvIT) for an enterprise value of ₹8,436 crore, and on 1 December 2025 it acquired VM7 Expressway from Sponsor IRB Infrastructure Developers for ₹1,217 crore. The three-asset acquisition was funded by ₹4,000 crore of external borrowings, ₹1,150 crore of NCDs, a ₹3,248 crore institutional placement, and a ₹1,005 crore preferential issue.
  2. Extensive NHAI and tax litigation includes a ₹3,108 crore claim, yet consolidated contingent liabilities are zero Major - IRB Infrastructure Trust, IRB Westcoast Tollway, and IRB Infrastructure Developers filed a claim on 15 June 2025 for ₹3,107.82 crore and a 1,482.86-day concession extension after the old Kali bridge collapse on 7 August 2024. Kaithal Tollway received a ₹375.20 crore arbitral award on 27 February 2026, of which ₹273.54 crore is to be passed to the Sponsor. The consolidated financial statements as at 31 March 2026 report no contingent liabilities, stating the Group has not provided for matters considered remote based on internal legal assessment.
  3. SEBI has issued multiple warnings and advisories to the Investment Manager and the InvIT since FY2024 Major - SEBI issued an Administrative Warning Letter on 13 May 2024 for non-distribution of Net Distributable Cash Flow in two SPVs and incorrect NDCF calculation. A further Administrative Warning with Deficiencies and Advisory on 28 March 2025 cited failure to review transactions between the project manager and its associates, along with inadequate disclosures on debt-maturity profile, NAV, gearing, and other items. On 16 March 2026, SEBI issued an advisory under Inspection of the Trust requiring a documented mechanism for periodic review of all transactions between the Project Manager and its associates.
  4. The Trust repeatedly acquires assets from its Sponsor and a private promoter InvIT, concentrating billions in related-party transactions Major - As at 31 March 2023, loans or advances to related parties stood at ₹4,255.26 crore, representing 100% of total loans. A Postal Ballot Notice on 2 July 2026 sought unitholder approval to re-appoint the Sponsor as Project Manager for three SPVs from 1 April 2030 until the end of each concession period, with an estimated aggregate value of up to ₹1,136 crore. A transfer pricing analysis dated 3 July 2026 concluded the O&M margin earned by the Sponsor (11.41% on cost) falls below the arm’s length range of 11.82% to 13.83%.
  5. Unit capital is classified as equity despite a mandatory 90% distribution obligation, and intangible amortisation relies on annually revised revenue projections Minor - The InvIT must distribute at least 90% of net distributable cash flows at least once every six months, creating a contractual obligation to pay cash, but unit capital is presented as equity to comply with SEBI InvIT regulations, which the auditor notes is at variance with Ind AS 32. Toll collection rights are amortised using revenue-based amortisation, with projected revenue reviewed at each balance sheet date and changes applied prospectively.
  6. Operating cash flow consistently exceeds PAT, but distributions are funded partly by capital returns and post-period SPV receipts Minor - Consolidated CFO exceeded PAT every year from FY21 to FY26, with FY26 CFO of ₹1,275 crore covering PAT of ₹339 crore by 3.76 times. The Trust excluded interest due but not received from SPVs from its NDCF computation: ₹18.95 crore in FY24, ₹35.39 crore in FY23, and ₹131.71 crore in each of FY22 and FY21. FY26 distribution of ₹1.60 per unit comprised ₹1.44 interest, ₹0.04 dividend, and ₹0.12 return of capital.
  7. Revenue is entirely toll-based with no reported trade receivables; the FY26 jump is acquisition-driven Minor - Consolidated toll revenue rose to ₹1,485 crore in FY26 from ₹1,084 crore in FY25, following the acquisition of three BOT projects and one HAM project. Trade receivables are reported at zero for FY26, FY25, FY24, and FY23. The Group recognised an additional expected credit loss of ₹0.64 crore during FY26, with an outstanding allowance of ₹0.64 crore as at 31 March 2026, compared to nil in the prior year.

What to watch

Bottom line: This is a toll-road business with genuine cash generation and a single operating segment that leaves little room for revenue complexity. The character of the risk is concentration: the Trust buys its growth from its Sponsor and a Sponsor-controlled private InvIT, funds those purchases with debt, and then hands the operations back to the Sponsor under contracts a transfer pricing analysis places below arm’s length. The litigation exposure is large and the consolidated balance sheet recognises none of it. Watch whether the proposed acquisitions close, how the Sponsor re-appointment vote lands, and whether the interest excluded from distributions for years is ever collected.