Shrem InvIT is a SEBI-registered Infrastructure Investment Trust (InvIT) established to own, operate, and maintain a diversified portfolio of road assets across India. The Trust operates under a **three-tier management structure** designed to ensure professional oversight and regulatory compliance: * **Sponsor:** Shrem Infra Invest Private Limited * **Investment Manager:** Shrem Infra Investment Manager Private Limited * **Trustee:** Axis Trustee Services Limited --- ### Asset Portfolio and Strategic Geographic Footprint As of early 2026, Shrem InvIT manages a robust portfolio of **37 operational road projects** (with two additional SPVs in the acquisition pipeline) covering approximately **11,741 lane kilometers**. The assets are strategically distributed across **nine Indian states**, providing a hedge against regional economic downturns or localized disruptions. **Geographic Presence:** Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh, Jharkhand, Chhattisgarh, Odisha, Karnataka, and Uttar Pradesh. **Portfolio Composition by Revenue Stream:** | Project Type | No. of Projects | Revenue Mechanism | | :--- | :---: | :--- | | **National Highway (HAM)** | **19** | Annuity + Interest + O&M Income | | **Toll (National & State)** | **2** | User Fee Collection | | **Annuity (State)** | **6** | Fixed Semi-annual Payments | | **Toll cum Annuity (State)** | **10** | Fixed Payments + User Fees | --- ### Revenue Model and Cash Flow Stability The Trust’s revenue is anchored by long-term concession agreements with the **National Highways Authority of India (NHAI)**, the **Ministry of Road Transport and Highways (MoRTH)**, and various state-level road development corporations. * **Hybrid Annuity Model (HAM) Dominance:** HAM projects contributed **91%** of total cash flow in FY24. Under this model, the government pays **40%** of the project cost during construction, while the remaining **60%** is paid as annuities over **15 years**. * **Interest Rate Hedging:** Revenue includes interest on the reducing balance at the **Bank Rate + 3.00% spread**. This provides a natural hedge, as the Trust’s debt is also largely linked to floating market rates. * **Toll Dynamics:** Toll revenue escalates at an average of **6% annually**, driven by traffic volume growth and regulated rate hikes. * **Annuity Certainty:** State-level annuity assets provide pre-determined biannual payments, shielding the Trust from traffic volatility. --- ### Financial Performance and Valuation Metrics Shrem InvIT has demonstrated consistent growth in its Assets Under Management (AUM) and revenue, supported by an **'AAA/Stable'** credit rating from India Ratings & Research. **Consolidated Annual Performance:** | Metric | FY 2024-25 | FY 2023-24 | | :--- | :--- | :--- | | **Revenue** | **₹2,590.24 Cr** | **₹2,035.32 Cr** | | **EBITDA** | **₹1,881.74 Cr** | **₹1,686.99 Cr** | | **Profit After Tax (PAT)** | **₹1,117.89 Cr** | **₹1,051.46 Cr** | | **Total Distributions** | **₹1,150.00 Cr** | **₹766.70 Cr** | | **Assets Under Management** | **₹14,997.00 Cr** | **₹13,847.00 Cr** | **Net Asset Value (NAV) Trends:** The Trust maintains a transparent valuation process, though NAV has seen a slight downward trend due to systematic impairment of assets nearing the end of their concession periods. * **NAV per Unit (Dec 31, 2025):** **₹95.34** * **NAV per Unit (Mar 31, 2025):** **₹102.71** * **Total Units Outstanding:** **610.84 Million** --- ### Capital Structure and Leverage Management The Trust employs a disciplined approach to debt, ensuring leverage remains well within the SEBI-mandated **70%** cap. * **Current Leverage:** Consolidated net leverage stood at **54.25%** as of March 2025. Management targets a cap of **60%** for future acquisitions. * **Debt Profile:** Primarily consists of floating-rate term loans (**₹8,438.40 Cr** as of March 2025). The Trust is also authorized to raise up to **₹1,000 crore** via **Non-Convertible Debentures (NCDs)**. * **Liquidity Buffers:** Maintains a **Contingency Reserve** of **₹90 Cr** (active until Dec 2026), alongside Debt Service Reserve Accounts (**DSRA**) and Major Maintenance Reserve Accounts (**MMRA**) to mitigate payment delays. * **Equity Fundraising:** Successfully raised capital through a **Preferential Issue** of **3,83,78,380 units** at **₹111 per unit** in late 2024 to fund growth and deleverage. --- ### Operational Framework and Risk Mitigation To ensure stable distributions, Shrem InvIT utilizes a **pass-through structure** for operational risks. * **Fixed-Price O&M Contracts:** Most SPVs have entered into fixed-price agreements with **Dilip Buildcon Limited (DBL)** or **Shrem Roadways Private Limited**. These contracts cover routine and **Major Maintenance and Repairs (MMR)**, protecting the Trust from inflation. * **Performance Guarantees:** DBL provides **Defect Liability Period (DLP)** and O&M deposits (totaling **₹166.68 crore** for six HAM projects) to secure maintenance obligations. * **Management Fees:** The Investment Manager receives **1%** of operational revenue, and the Project Manager (**Shrem Road Projects Private Limited**) receives **0.5%**. * **Digital Governance:** Employs **GIS mapping**, **AI-based surveillance**, and real-time defect tracking to ensure **100% regulatory compliance** and operational efficiency. --- ### Acquisition Strategy and Growth Pipeline The Trust focuses on acquiring **operational, value-accretive** assets to eliminate construction risk. **Recent and Pending Acquisitions:** * **Completed (Sept 2024):** APCO Arasavalli (**₹110.68 Cr**), APCO Navkalyan (**₹212.97 Cr**), and Freedom Point Expressway (**₹122.37 Cr**). * **Completed (July 2024):** Acquired the remaining **51%** of Pathrapali Kathghora Highways for **₹37.52 Cr**. * **Pipeline:** Binding Term Sheet signed for **2 Road SPVs (APCO & Chetak)** valued at **₹419.4 Cr**, pending final approvals. --- ### Unitholder Distribution Policy Shrem InvIT is mandated to distribute at least **90%** of its **Net Distributable Cash Flows (NDCF)** to unitholders at least once every six months, though it currently follows a **quarterly** payout cycle. * **Total FY25 Distribution:** **₹16.98 per unit**. * **18th Distribution (Feb 2026):** **₹5.4180 per unit** (comprising Dividend: **1.109**; Interest: **2.738**; Return of Capital: **1.571**). --- ### Risk Factors and Monitorables Investors should be cognizant of the following regulatory, legal, and operational risks: * **Regulatory Oversight:** SEBI issued **Administrative Warnings** in 2025 and 2026 regarding delays in NAV disclosure, discrepancies in Independent Director meetings, and non-compliance with voting provisions for related party transactions. * **Taxation and Audits:** An **Income Tax Department search** occurred in January 2025. While operations were unaffected, the outcome remains a monitorable. * **Asset Impairment:** The Trust recognized an aggregate impairment of **₹740.45 crore** for the nine months ended Dec 31, 2024, reflecting the declining value of assets nearing concession expiry. * **Litigation:** The Trust is involved in **11 arbitrations** and **5 litigations** (as of June 2025). However, **Dilip Buildcon** provides indemnities against financial losses from these claims. * **Unit Pledges:** Significant portions of Sponsor units are pledged to secure debt, including multiple pledges created in August 2025 for NCD issuances. * **Macroeconomic Sensitivity:** A **25 bps** fluctuation in interest rates impacts annual profit by approximately **₹19.82 Cr**. Additionally, toll revenue remains sensitive to fuel prices and the shift toward GPS-based tolling.