Road developer IL&FS Transportation Networks Ltd (ITNL) will monetize three or four of its mature assets by creating an infrastructure investment trust (InvIT), a top company official said. The company, one of India’s largest build, operate, and transfer (BOT) road operators, is finalizing plans to launch a trust over the next six to nine months, chief financial officer Dilip Bhatia said in a phone interview. InvITs are trusts which manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects. In May, market regulator Securities and Exchange Board of India (Sebi) released norms for the public issue of units of InvITs—the final set of major rules that were awaited before companies could start marketing their issues. “We find it will be a good vehicle to monetize some of our mature assets. While plans are being firmed up, we will look at three to four projects, which will probably go into InvIT and that will help us reduce debt substantially at the consolidated level,” he said. ITNL, with 31 road projects in its portfolio, had consolidated debt of Rs.27,643 crore as on 31 March.
Road developer IL&FS Transportation Networks Ltd (ITNL) on Thursday said it has agreed to sell a road project in Andhra Pradesh to Cube Highways and Infrastructure Pte. Ltd, a joint venture between I Squared Capital and International Finance Corporation, for Rs.140.37 crore. Cube Highways will also assume debt of about Rs.500 crore associated with the project. As a result, ITNL’s consolidated debt will be reduced by about Rs.640 crore, chief financial officer Dilip Bhatia said in a phone interview. The annuity-based project—Andhra Pradesh Expressway Ltd (APEL)—operates a 75km four-lane road stretch on NH-7 across Andhra Pradesh and Telangana. APEL has a seven-year operating history. ITNL, which has 31 road projects in its portfolio, had consolidated debt of Rs.27,643 crore as on 31 March.
Tech education startup AcadGild and IL&FS Skills Development Corporation have partnered to offer technology and business oriented courses to students aimed at improving their employability potential. The pact eyes skilling over two lakh Indian students by 2019, the companies said in a joint statement.
The Telangana Government is planning to set up an International Leather Complex at Station Ghanpur in Warangal district. The Rs 270-crore park will come up in an extent of 117 acres. IL&FS Cluster Development Initiative Ltd has prepared the project proposal.
Infrastructure Leasing & Financial Services (IL&FS) is making final preparations to list India's first infrastructure investment trust (InvIT) to raise Rs 5,000 crore, or $750 million, by early October, a top company executive said. The Mumbai-headquartered IL&FS plans to put four of its 30 big projects into the InvIT initially. It would be a test case for the recently allowed trusts owning income-generating assets to raise capital for the infrastructure build-up in Asia's third largest economy. "The market regulator and the finance ministry have been supportive as we are working towards becoming the first InvIT to list on the bourses. We are almost there, and hope to get clearance very soon. Our plan is to go for the listing by September-end or early October," Ramesh C Bawa, MD & CEO, IL&FS Financial Services, said in an interview.
As a part of this programme, YES BANK has initiated strategic tie-ups with reputed training institutes like TimesPro, HCL TalentCare, Teamlease Skills University, IL & FS Skills Development Corporation amongst others.
Mr Jim Yong Kim, President, World Bank visited IL&FS Institute of Skills, Delhi and took a first hand experience of the technology aids used for training at centre.
SDMC launches integrated system for garbage collection and disposal From Daryaganj to Badarpur, residents of South Delhi’s Central Zone will find it easier to dispose of garbage from Thursday morning. The South Delhi Municipal Corporation on Wednesday launched an integrated system for collection and disposal of garbage in its Central Zone, with the remaining three Zones to follow later this year. Under the new system, there will be door-to-door garbage collection and segregation at source by the civic body for the first time. Flagging off the scheme, Union Home Minister Rajnath Singh said the new mechanism was in continuation of the work under the Swachh Bharat Abhiyan.
IL&FS Transportation Networks Ltd (ITNL), one of the largest roads developers in the country, on Wednesday said Australia’s Macquarie Group Ltd had bought a 15% stake in its Gujarat project. ITNL said Macquarie’s investment vehicle MAIF Investments India Pte. Ltd bought the additional stake in its roads subsidiary Gujarat Roads and Infrastructure Co Ltd. for about Rs.109.8 crore. In January 2015, Macquarie had acquired about a 42% stake in Gujarat Roads and Infrastructure for Rs.650 crore, according to a presentation by Macquarie dated 30 September 2015. After the latest transaction, Macquarie will hold a 56.8% stake in Gujarat Roads and Infrastructure, while ITNL will cease to have management control. ITNL said in a BSE filing that it will, however, continue to hold 26.8% in the company. ITNL has 31 road projects in its portfolio, of which 22 are operational. The company has been looking to monetize its portfolio of operational build, operate and transfer (BOT) road assets for several months and has evaluated options ranging from listing these projects under the newly approved infrastructure investment trust to an outright sale, in order to cut debt and fund projects under construction. The company is one of India’s largest BOT road operators with exposure to national and state highways, urban roads, tunnels, flyovers and bridges. It had consolidated debt of Rs.26,213 crore as of 30 September.
L&FS Transportation Networks Ltd’s (ITNL) robust performance in the March quarter is the result of a better-than-expected-income from all its business segments. One, construction income was the sweet spot that drove net revenue higher by about 72% from a year earlier, catapulting it higher than the street’s forecast. Two, the pace of project completion was faster, and, three, tolling revenue came in higher than expected. So, a huge revenue beat pushed up the quarter’s operating profit by about 80% from a year earlier. Further, ITNL’s decent order book provides growth assurance over the next 12-18 months. But then, the high proportion of income from the construction segment turns out to be a double-edged sword. While it fuels revenue growth, it does not augur well for profit margins. Operating margin at 30.5%, although wider than the year-ago period, fell short of that pencilled in by brokerages. ITNL’s margin was also impacted adversely by a Rs.44 crore provisioning made during the quarter towards loans that the firm is doubtful of receiving. The concerns on profitability are likely to continue as most of the orders are in the low-margin construction segment. This is not all. ITNL’s balance sheet is already highly stressed with a debt-to-equity ratio in excess of 4. This weighs down investor sentiment, which makes the ITNL stock wobbly. Besides, in spite of turning in a better than expected revenue and order book growth, the stock has underperformed the benchmark indices in the last one year. The silver lining in the cloud of debt is that the recently raised money, through a rights issue, should lower leverage. But according to the post-results review by Emkay Global Financial Services Ltd, “Leverage continues to surge higher and ITNL earnings highly leveraged to new orders, equity funding gap would still put pressure on balance sheet What would work in favour of the company is strong revenue traction as new projects are due to get commissioned, easing cash flows from business operations over the next 12 months. ITNL’s trump card would be its ability to monetize some of its existing and operational assets. Also, funds could be raised through the new route of Infrastructure Investment Trust, for which approval is awaited from the regulatory authority.