Latest news with #IndiGridInfrastructureTrust
Mint
a day ago
- Business
- Mint
IndiGrid InvIT is offering more than 10% yield: Should you invest?
Since the start of the calendar year, the Reserve Bank of India (RBI) has cut interest rates by 100 basis points. It has led to a fall in interest rates on fixed-income products like bank fixed deposits. As a result, investors have been exploring alternatives in the search for higher returns. During the same period, the share prices of listed REITs and InvITs have rallied in the 5 to 15% range. With interest rates falling, the demand for these REITs and InvITs has gone up as they offer decent yields with the potential for capital appreciation. One such InvIT is IndiGrid Infrastructure Trust, which is offering a more than 10% yield. In this article, we will understand what InvITs are, the SEBI guidelines, how the IndiGrid InvIT has performed, and whether you should invest. In February 2025, the RBI cut the Repo Rate by 0.25% to 6.25% after holding it steady for 2 years. The RBI further cut the Repo Rate by another 0.25% in April and another 0.50% in June. So far, till August, the RBI has cut the Repo Rate by 1% or 100 basis points. As a result, banks have reduced the interest rates on their fixed deposits by around 1%. During the August 2025 MPC meeting, the RBI revised the CPI inflation projection to 3.1%, far lower than the earlier 3.7% projection in June. As the CPI inflation is expected to be lower than the target of 4%, experts expect the RBI to cut interest rates further in the coming months. The quantum and timing of interest rate cuts will depend on the incoming economic and inflation data. If and when the RBI cuts interest rates further, banks are also expected to cut the interest rates on their fixed deposits. The lower interest rates can further reduce the appeal of bank fixed deposits. In such a scenario, should you look at an InvIT like IndiGrid Infrastructure Trust (InvIT) for its high yield? Let us discuss. An Infrastructure Investment Trust is a Collective Investment Scheme (CIS), similar to a mutual fund. An InvIT pools money from investors and is SEBI-regulated. The money is invested in operational and revenue-generating infrastructure projects like highways, power transmission lines, warehouses, telecom towers, pipelines, etc. The income earned from these investments is shared with investors through regular distributions. An Investment Manager manages the trust. The InvIT can be listed or unlisted. Currently, some of the listed InvITs in India include: IndiGrid Infrastructure Trust Powergrid Infrastructure Investment Trust IRB Infrastructure Developers Limited Indus Infra Trust As per SEBI Regulations, a public InvIT must invest at least 80% of its money in completed and revenue-generating infrastructure projects. The remaining 20% money can be invested in under-construction infrastructure projects or other avenues as per SEBI Regulations. The regulations significantly reduce the execution risks that under-construction infrastructure projects may carry. The net borrowing for an InvIT is capped at 70% of its Assets Under Management (AUM). It ensures the InvIT doesn't take too much leverage. The InvIT must mandatorily distribute 90% of the net distributable cash flow (NDCF) to its unitholders. Most listed InvITs make quarterly distributions in the form of Distribution Per Unit (DPU). So, the SEBI Regulations reduce execution risks, keep leverage in check for InvITs, and ensure regular distributions to unitholders. IndiGrid is India's first and largest publicly listed InvIT. It owns, operates, and manages power transmission, renewable generation, and energy storage assets that deliver power throughout India. IndiGrid's vision and mission are to become the most admired yield vehicle in India. It is a AAA-rated company with Rs. 32,437 crores of Assets Under Management (AUM). These assets are spread across transmission lines, transformation capacity, solar generation capacity, and battery energy storage capacity. It operates across 20 States and 2 Union Territories. IndiGrid InvIT got listed in June 2017 with an issue price of Rs. 100 per share. Over the years, the company has acquired various projects in the power sector and grown its AUM. Since its listing till August 2025, the company has given a Distribution Per Unit (DPU) of Rs. 105.32/unit. So, if someone had invested in the IPO and is still holding the shares, they would have received more money in distributions than they had invested. The 5-year distribution trend of the company is as follows. Financial year (FY) Distribution per unit (DPU) FY 2022 Rs. 12.76 FY 2023 Rs. 13.35 FY 2024 Rs. 14.10 FY 2025 Rs. 15.35 FY 2026 (Company guidance) Rs. 16.00 The company makes quarterly distributions and declares them along with the quarterly financial results. For example, for Q1 FY 2025-26, the company declared a DPU of Rs. 4/unit. Since its listing, the company has given a total return of 157% (capital appreciation + DPU), resulting in annualised returns of 12%, which is decent. The IndiGrid units are listed on stock exchanges like the NSE and BSE. An individual can buy IndiGrid units through their trading and demat account just like shares of any other listed company. Suppose an individual has a Zerodha trading account. They can place a buy order from their trading account, and the units will be credited to the demat account. Similarly, when the units are sold, the units are debited from the demat account, and the sale proceeds are credited to the bank account. Over the years, the company has performed well by growing its AUM by acquiring power projects from time to time. For future projects, the company has indicated a high bidding activity in the transmission and BESS sectors. The total project value of the bid pipeline remains strong, which provides scope for the company to keep growing. For FY 2025-26, the company has guided for a DPU of Rs. 16/unit. The current price per unit is around Rs. 155. It translates into a yield of more than 10%, which is higher than what most bank fixed deposits and many other fixed income instruments currently provide. However, an investor must note that InvITs, REITs like IndiGrid, are hybrid instruments with equity and debt characteristics. The IndiGrid units trade like equity shares, wherein the unit price moves up or down depending on the company's financial performance. If the company's financial performance is good, it can result in capital gain. However, if the financial performance is not good, it can result in capital loss. Also, the DPU depends on financial performance. If the financial performance is good, the company will continue delivering the same DPU or increase it in the future. However, if the financial performance is not good, the company will have to cut the DPU. Whether one should invest in IndiGrid or other InvITs/REITs depends on the investor's investment objective, risk appetite, investment time horizon, and other factors. You must consult a good financial advisor with the requisite qualifications and experience. The financial advisor will assess your risk appetite and other factors and accordingly recommend whether you should invest. Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit. For all personal finance updates, visit here.
Business Standard
25-07-2025
- Business
- Business Standard
IndiGrid Infrastructure Trust consolidated net profit declines 46.06% in the June 2025 quarter
Sales rise 0.57% to Rs 839.85 crore Net profit of IndiGrid Infrastructure Trust declined 46.06% to Rs 72.37 crore in the quarter ended June 2025 as against Rs 134.16 crore during the previous quarter ended June 2024. Sales rose 0.57% to Rs 839.85 crore in the quarter ended June 2025 as against Rs 835.13 crore during the previous quarter ended June 2024. Particulars Quarter Ended Jun. 2025 Jun. 2024 % Var. Sales 839.85835.13 1 OPM % 82.8890.84 - PBDT 349.43419.41 -17 PBT 74.01146.12 -49 NP 72.37134.16 -46
Reuters
21-07-2025
- Business
- Reuters
India's investment trusts to expand debt fundraising as yields drop, analysts say
MUMBAI, July 21 (Reuters) - Debt fundraising by India's asset-backed investment trusts is expected to keep rising after exceeding $2 billion in the first half of 2025, as falling interest rates continue to fuel strong investor demand, analysts said. The real estate investment trusts (REIT) and infrastructure investment trusts (InvIT) raised over 178 billion rupees ($2.07 billion) in January-June, compared with 56 billion rupees in the same period last year, according to data aggregator Prime Database. "Bonds offer a lower cost of capital compared to traditional bank financing, especially for highly rated trusts with stable, long-term cash flows," Arka Mookerjee, partner at JSA Advocates and Solicitors, which provides legal advice to corporates. "The predictable income profiles of REITs and InvITs make them well-suited to debt financing, attracting institutional investors seeking yield-bearing, asset-backed instruments." Corporate bond yields have tumbled over the last few months, as the central bank infused liquidity and slashed interest rates by 100 basis points, while banks have lagged in lowering their lending rates. Embassy Office Parks REIT, IndiGrid Infrastructure Trust, Cube Highways Trust and Nexus Select Trust are among the firms that have tapped the bond market. Embassy REIT is planning another bond issue, Reuters reported last week, while others are also in early talks. Bonds typically have fewer restrictions than bank loans, allowing REITs to use the fund across multiple properties within the portfolio, said Lata Pillai, India senior managing director and head of capital markets, JLL, a global real estate services firm. The trusts, which need to disburse at least 90% of net distributable cash flows to unit holders, say cheaper funding allows them to provide better returns. Bond fundraising provides clarity to these trusts on planning their finances, while top credit ratings attract marquee investors such as mutual funds and insurers. "The AAA-rated structure gives greater credibility, visibility and better pricing," said Krishnan Iyer, chief executive officer at NDR InvIT, adding they also offer resilience to market volatility. With infrastructure and real estate sectors gaining momentum, investors see REITs and InvITs as a compelling blend of fixed-income stability and long-term growth, said Suresh Darak, founder of Bondbazaar, an online bond trading platform. ($1 = 86.1700 Indian rupees)
Yahoo
19-05-2025
- Business
- Yahoo
IndiGrid Infrastructure Trust (BOM:540565) Q4 2025 Earnings Call Highlights: Strong Revenue ...
Release Date: May 16, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. IndiGrid Infrastructure Trust (BOM:540565) successfully commissioned India's first utility-scale battery energy project in Delhi, demonstrating timely execution and quality. The company reported a year-on-year revenue growth of 11.3% and an increase in operational revenue by 1.6%, showcasing financial growth. Collections for Q4 2025 were strong, with 115% for transmission assets and 89% for solar, boosting net distributable cash flow. The distribution per unit (DPU) guidance was increased to INR 16, reflecting a 6.7% growth over previous guidance. IndiGrid Infrastructure Trust (BOM:540565) maintains a robust balance sheet with a AAA rating and a net debt to AUM ratio of 59.1%, providing significant headroom for growth. The average quarterly transmission availability was reported at 98.4%, which is lower than expected due to disruptions in certain assets. There is a conservative approach to distribution guidance despite having reserves equivalent to one quarter's distribution, which may limit immediate returns to investors. The company faces statutory limits on the amount of under-construction projects it can undertake, potentially restricting growth. Operational challenges were noted in two assets, GPTL and JKPTL, which are undergoing restoration. The company has a high leverage ratio, with gross borrowings of around INR 19,900 crore, which could pose risks if interest rates rise. Warning! GuruFocus has detected 13 Warning Signs with BOM:540565. Q: Can you elaborate on the management compensation structure and the tariff upside mentioned in your valuation report? A: A significant portion of our long-term incentives and acquisition-linked incentive payments are deferred, and many senior team members have invested in unit ownership. Regarding the tariff upside, there are potential gains from GST changes and other regulatory matters that could positively impact our solar assets. - Unidentified_3 (Managing Director) Q: Is there any provision for escalation in transmission charges due to extraordinary circumstances like inflation or currency depreciation? A: There are change-in-law clauses in the model concession agreement, but inflation and currency depreciation are not considered changes in law. Specific items like GST changes could qualify. - Unidentified_3 (Managing Director) Q: Why is there a difference between the reported revenue and operational revenue? A: The difference arises from accounting requirements for under-construction projects, where revenue and associated margins are accounted for separately. This adjustment helps show the operational performance more accurately. - Unidentified_4 Q: Why create a separate entity, Integrad, for new projects instead of doing it within IndiGrid? A: IndiGrid, as an InvIT, has statutory limits on under-construction projects. Creating Integrad allows us to undertake larger projects without these constraints, enabling better growth opportunities. - Unidentified_3 (Managing Director) Q: How do you ensure fair value when selling projects from Integrad to IndiGrid? A: There is a partnership approach between Integrad and IndiGrid to win projects. The terms are set at the time of bidding, ensuring transparency and fair value for both entities. - Unidentified_3 (Managing Director) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
