IL&FS subsidiary Roadstar Infra InvIT lists on NSE as part of debt resolution

NSE Indices launches Nifty Chemical index

Roadstar Infra Investment Trust (InvIT), a wholly-owned subsidiary of Infrastructure Leasing & Financial Services (IL&FS), listed on NSE following the distribution of its units - having six underlying road assets - at an enterprise valuation of Rs 8,592 crore (face value Rs 100).

The listing is a step towards the debt resolution of IL&FS, following the interim distribution of Rs 5,000 crore to creditors. This distribution comprises Rs 3,500 crore of InvIT units and Rs 1,500 crore in cash.

Roadstar Infra Investment Trust has a market cap of Rs 4,554.77 crore.

The unit distribution breakdown reveals that a total of Rs 4,554.77 crore worth of units were issued, with 78% (Rs 3,550 crore) allocated to eligible creditors as public holding. The sponsor retained a 15% stake (Rs 688.06 crore), locked in for three years. Existing unitholders have 7% (Rs 316.71 crore), subject to a one-year lock-in. Post-listing, the total number of unitholders stands at 223, suggesting a concentration of institutional or large investors instead of a widespread retail participation.

The IL&FS Board opted for the InvIT route in 2019 after individual road asset monetisation efforts yielded weak responses, and the InvIT option presented better valuations for the creditors.

Consequently, after requisite approvals, Roadstar Infra Investment Trust was established with Roadstar Investment Managers appointed as investment manager, and Elsamex Maintenance Services as the project manager. Six road assets as underlying assets were transferred to the InvIT in due course.

Initially, 11 operational road assets with an estimated enterprise fair value of around Rs 11,000 crore were selected for transfer to the InvIT, but finally, only six assets were transferred.

At the listing ceremony of the InvIT, Nand Kishore, the Chairman and Managing Director of IL&FS Group said, “The successful listing of IL&FS InvIT represents an innovative resolution option that was chosen and completed by the new Board thereby ensuring efficient resolution while maximising returns for our road assets. Monetisation, Interim distribution and now successful listing of Roadstar InvIT on NSE, are pivotal moments in IL&FS resolution process.”

IL&FS recently concluded its largest interim distribution payout of Rs 5,000 crore that pegged the total debt discharged by IL&FS Group to Rs 43,000 crore, representing 70 per cent of its total debt resolution target of Rs 61,000 crore.

Danny Samuel, the Chief Executive Officer of Roadstar Investment Managers (RIML) said, “The successful listing of IL&FS InvIT on NSE represents a significant milestone in resolving a large portion of the IL&FS debt. Following the listing, the Trust will offer a new platform for risk-averse investors interested in the alternative investment sector."

This marks the first instance where the resolution of stressed assets is achieved via an InvIT framework.

Axis Capital acted as the sole book-running lead banker, with legal counsel provided by S&R Associates for the issuer and Cyril Amarchand Mangaldas for the bankers.