Vertis Infrastructure Trust is a listed landlord for India’s highways - it buys operational toll roads and annuity roads from developers and the government, then collects the steady cash those roads generate for its unitholders. It was formed in 2021 when KKR swapped six road assets it had bought from Global Infrastructure Partners into a newly created Infrastructure Investment Trust, listing it on the National Stock Exchange in 2022. The recurring approach that explains everything else is a buy-and-hold model: acquire revenue-generating roads, run them with a lean technology-heavy operations team to squeeze out costs, and use the predictable cash flows to buy more roads - a cycle that has taken the portfolio from six assets to 28 in under four years. # Business segments A single business - owning and operating Indian road concessions - split into two revenue models that together provide both upside to economic growth and a floor of predictable government-backed payments. ## 1. Toll roads: where traffic growth becomes cash **The Trust collects a fee from every vehicle on 12 highways and bears the risk of how many show up - a bet on India’s freight and passenger movement that has delivered roughly 7% annual traffic growth over seven years.** - **Paid per vehicle, with built-in price rises** - toll rates escalate every year under formulas set in each concession agreement, typically linked to inflation indices like WPI or CPI, with one asset getting a fixed 7% annual increase. That means revenue grows even if traffic stays flat. - **Traffic has consistently beaten projections** - AUM-weighted traffic grew 9.9% in FY26 against a projected 5.5%, and toll revenue outperformed valuation-report estimates by 4.3%. The roads sit on corridors connecting industrial hubs and ports like Kandla, Mundra, and Chennai, so they rise and fall with factory output and construction activity. - **The government compensates for policy decisions** - when NHAI delays a toll-rate revision or sells discounted annual passes to car users, it pays the Trust the difference, with pass-related compensation alone covering between 11.6% and 50.5% of car revenue across assets. That turns a political risk into a receivable. - **Technology keeps the cash coming faster** - one toll plaza moved to Single Lane Free Flow tolling and doubled peak throughput from 110 to 200 vehicles per minute, while a barrier-less Multi Lane Free Flow pilot is now live on NH-48 in Gujarat. Faster throughput means fewer missed tolls and less congestion-driven traffic loss. - **No single road dominates** - the largest toll asset contributes less than a quarter of total operating revenue, and the 13 SPVs have tolling track records of 8 to 22 years, so the portfolio does not live or die on any one stretch. ## 2. Annuity and hybrid annuity roads: the predictable floor **The Trust receives fixed semi-annual payments from NHAI on 16 roads regardless of how many vehicles use them - a contracted cash-flow stream with INR 110 billion still to come.** - **Payment is guaranteed, not guessed** - under the pure annuity model, the government pays a predetermined sum every six months that does not change with traffic, inflation, or interest rates; under the hybrid annuity model, those payments also include periodic inflation and interest-rate adjustments. The result is revenue the Trust can count years in advance. - **The counterparty is predominantly the National Highways Authority of India** - NHAI is the counterparty for 10 of the 13 project SPVs, and the older annuity projects have already received 28 and 21 consecutive semi-annual payments without material deductions. That track record turns a government promise into a demonstrated payment history. - **A single large acquisition transformed the mix** - in FY26 the Trust bought 12 assets (11 HAM and 1 toll) from PNC Infratech, adding roughly 3,400 lane kilometres and growing total assets under management by 43% in one year. The deal was structured in tranches, with the final asset closing in March 2026. - **The balance receivable is the moat** - INR 110 billion in annuities are still owed to the Trust as of March 2026, providing a visible multi-year revenue pipeline that does not depend on economic cycles. That is the floor beneath the toll-road upside. # Operations and maintenance capability **A lean, technology-stuffed O&M engine that runs 28 road assets with a small project-level team and a centralised procurement system - turning maintenance from a cost centre into a source of savings.** - **Data-driven pavement and bridge management** - the Trust runs Network Survey Vehicles and Falling Weight Deflectometer surveys on its roads and uses a Mobile Bridge Inspection Unit on structures, so it knows exactly where to spend before a pothole becomes a claim. That lifecycle approach delivered O&M cost savings of 1.31% versus valuation-report projections. - **Engineering innovations that pay back** - switching to Stone Matrix Asphalt on roughly 140 two-lane kilometres at one asset is expected to save INR 730 million over the road’s life, while micro-surfacing for rut repairs costs about 40% less than traditional bituminous overlays and retains 98% of its performance. Fine milling at another project cut costs by roughly 70% versus conventional methods. - **A digital backbone watches everything** - the RAMP portal gives real-time defect tracking with GPS coordinates, RoadCast monitors every maintenance vehicle’s fuel and driver behaviour, and a satellite-based system using SAR and LiDAR can detect millimetre-level displacement on structures. A business-intelligence tool called PULSE delivers live toll-revenue reporting from every BOT project. - **Safety is measured and rewarded** - four project SPVs won the International Safety Award from the British Safety Council, and the portfolio achieved 97% Lost Time Injury-free man-hours in FY26 alongside a 354% jump in near-miss reporting. Twenty-seven Truck Mounted Attenuators protect maintenance crews on live highways. # Group structure and partners **A KKR-sponsored InvIT with a three-entity governance structure - Trustee, Investment Manager, and Project Manager - that separates asset ownership from decision-making and day-to-day operations.** - **The Trust owns the assets, the Manager calls the shots** - Axis Trustee Services holds the Trust’s assets on behalf of unitholders, while Vertis Fund Advisors (the Investment Manager) makes all investment decisions and Vertis Project Manager runs the roads. Both the Investment Manager and Project Manager are paid fees capped as a percentage of revenue and asset value, aligning their interests with portfolio performance. - **KKR is the controlling sponsor** - Galaxy Investments II and related KKR entities held roughly 58% of units as of March 2026, with Ontario Teachers’ Pension Plan at about 22% and the remaining 20% spread across public investors, mutual funds, and insurers. A block sale in September 2025 reduced Galaxy’s direct stake from roughly 28% to 14%, widening public float. - **Debt is centralised and investment-grade** - a Central Facility Agreement consolidates all borrowings except one joint venture at the InvIT level, with INR 115 billion outstanding at a weighted average cost of 7.32% and an average maturity of 11.6 years. The Trust carries a AAA rating from CRISIL and in June 2025 raised INR 9,000 million through a 10-year Sustainability-Linked Bond, the largest such issuance by an Indian InvIT. - **One joint venture brings in a state government** - the Trust owns a 56.8% stake in Gujarat Road and Infrastructure Company, with the Government of Gujarat holding the rest; GRICL runs two toll roads that have been collecting tolls since 2000 and 2003 and distributes 90% of its net cash annually.