IRB InvIT Fund will acquire 100% stake in SYTL and CGTL for an enterprise value of ₹4,605 crore. The fund also plans to raise up to ₹3,000 crore to support its growth strategy. Unitholder approval is pending.
IRB InvIT Fund Acquires Toll Road Assets for ₹4,605 Crore
IRB InvIT Fund to acquire 100% equity in SYTL and CGTL for ₹4,605 crore.
IRB InvIT Fund plans to raise up to ₹3,000 crore.
Reader Takeaway: Inorganic growth via asset acquisition; significant fundraising planned to fuel expansion.
What just happened
The Board of Directors of IRB InvIT Fund has approved a binding term sheet to acquire 100% equity shares of Solapur Yedeshi Tollway Limited (SYTL) and CG Tollway Limited (CGTL). This acquisition is from a private InvIT and is classified as a related party transaction.
The total enterprise value for these two toll road entities stands at ₹4,605 crore. The equity consideration for the purchase is ₹2,744 crore. The valuation also factors in existing external gross debt of ₹591 crore for SYTL and ₹1,270 crore for CGTL.
Why this matters
This acquisition is a significant step for IRB InvIT Fund's inorganic growth strategy. It aims to enhance revenue stability, expand the portfolio, achieve geographical diversification, and ensure long-term operational continuity. The deal is expected to contribute to an increase in the cumulative distribution per unit (DPU) for unitholders.
The backstory
The acquired SPVs, SYTL and CGTL, have projected combined turnovers of ₹249.02 crore for FY25 and ₹306.59 crore for FY26, with ₹258.44 crore in FY24. The Sponsor, IRB Infrastructure Developers Limited, has been appointed as the project manager for Operation & Maintenance (O&M) works, with a fixed-price contract valued at approximately ₹2,663 crore for the balance concession period.
What changes now
The IRB InvIT Fund plans to raise up to ₹3,000 crore through various instruments, including institutional placements, further public offers, rights issues, or debt instruments like term loans and non-convertible debentures. This fundraising is intended to support the acquisition and future growth.
Risks to watch
Completion of the acquisition is subject to meeting customary conditions precedent, notably obtaining necessary regulatory approvals and consent from unitholders. The long-stop date for completion is December 31, 2026, with an indicative completion target of September 30, 2026.
Peer comparison
While specific peer financial data is not provided in the filing, the acquisition strategy focuses on toll road assets, a common segment for Infrastructure Investment Trusts (InvITs) in India seeking stable, long-term cash flows.
Context metrics (time-bound)
- Acquired Assets Enterprise Value: ₹4,605 crore.
- Equity Consideration: ₹2,744 crore.
- Project Management Contract Value: ~₹2,663 crore.
- Fundraising Target: Up to ₹3,000 crore.
- Indicative Completion Date: September 30, 2026.
- Long-stop Date: December 31, 2026.
What to track next
Investors should closely monitor the progress of the postal ballot process to gauge unitholder approval for the acquisition and fundraising. Subsequent regulatory filings and updates on the fundraising execution will be key areas to watch.