IRB InvIT Fund Management Discussions

Management Discussion and Analysis

Economic Overview Indian Economy

India, the worlds fourth-largest economy, has emerged as the fastest-growing major economy and is on track to become the worlds third-largest economy with a projected GDP of $7.3 trillion by 2030. India is projected to be worlds fastest growing major economy (6.3% to 6.8% in 2025- 26)¹. This transformation is the result of a decade of decisive governance, visionary reforms, and global engagement under the present Government. Driven by robust domestic demand, a dynamic demographic profile, and sustained economic reforms, India is asserting its rising influence in global trade, investment, and innovation. The numbers reflect Indias shift in last eleven years, from a ‘dependent economy to a self-reliant, globally competitive powerhouse. However, prolonged global supply chain disruptions, heightened volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook.

At the core of this transformation is the vision of ‘Aatmanirbhar Bharat, a movement that promotes innovation, entrepreneurship, and technological sovereignty. Strategic initiatives like the Production Linked Incentive (PLI) schemes, revitalisation of MSMEs, and the expansion of digital infrastructure have laid the foundation for a high-growth, high-opportunity economy.

Indias economy sustained a stable growth trajectory in FY 2025-26. Despite global economic headwinds, the country remained among the fastest-growing major economies, with real GDP expanding by ~7.7%². Further, inflation moderated to ~3.48 during the year, remaining within the Reserve Bank of Indias target range of 2%-6%. This was supported by easing input costs, improved supply conditions and proactive monetary policy measures³.

Demand conditions remained favourable, supported by stable employment levels and rising disposable incomes, thereby supporting consumption. Tax reforms, along with the rationalisation of the Goods and Services Tax (GST) contributed to increased consumer spending. On the supply side, Construction activity recorded growth, driven by sustained public capital expenditure and continued momentum in infrastructure projects. Industrial growth remained broad-based across sectors, backed by resilient domestic demand, ongoing infrastructure investments and steady expansion across core and manufacturing sectors.

The governments capital outlay of ~ Rs.11.21 lakh crore for FY 2025-26 reflects its continued focus on infrastructure development. Expansion across roads and highways is aimed at improving efficiency and strengthening network integration⁴.

Outlook

External factors like trade barriers and capital volatility may impact exports and investor sentiment. However, investment remains supported by strong capacity utilization, rising credit growth, and continued government capital expenditure. Meanwhile, favourable supply conditions and the gradual pass-through of GST rate rationalisation are expected to keep the inflation outlook benign. The focus of the Government is to promote healthy aging, enhance labour force participation and foster productivity growth.

However, the economy remains sensitive to geopolitical developments due to its reliance on crude oil imports. An increase in fuel and bitumen costs may lead to higher road maintenance costs and increased vehicle operating expenses. To mitigate these risks, India has diversified its crude oil import sources and expanded domestic refining capacity while also promoting alternative energy adoption.

Despite global uncertainties, domestic growth drivers are expected to remain resilient. With stable macroeconomic conditions and ongoing reforms, the economy is expected to sustain growth in the near term. These domestic factors shape the outlook for FY 2026-27, along with changing external conditions.

Industry Review

Indias Infrastructure Overview

Infrastructure remains a critical driver of India s economic growth and social development. Indias infrastructure is much more than cement and concrete. Large-scale investments in roads and related infrastructure have significantly improved connectivity, expanded capacity and enhanced logistics efficiency. Indias infrastructure guarantees a better future and connects people. India has increased public investment in transport infrastructure, with schemes such as the Bharatmala Pariyojana and the National

Infrastructure Pipeline enhancing connectivity, efficiency and reducing logistics costs in the Country.

Flagship programs led by MoRTH continue to drive sectoral growth. The Bharatmala Pariyojana aims to develop 34,800 km of highways with an estimated investment of INR 5.35 lakh crore, focusing on economic corridors, border connectivity, and access to remote regions. Complementing this, the Pradhan Mantri Gram Sadak Yojana (PMGSY) enhances rural road connectivity, thereby improving access to markets, education, and healthcare services in underserved areas.

Integrated planning under the PM Gati Shakti programme, along with reforms in financing, asset monetisation and public-private partnerships (PPPs), has improved project preparation and execution. These measures have also encouraged greater private sector participation. As a result, India accounts for over 90% of South Asias Private Participation in Infrastructure (PPI) investment⁵.

Indias infrastructure programmes deploy multiple PPP models, including Build Operate Transfer (BOT), Design Build Finance Operate Transfer (DBFOT), Hybrid Annuity Model (HAM) and Toll Operate Transfer (TOT). Within the BOT framework, there are two variants—BOT Toll and BOT Annuity which differ in the allocation of traffic risk.

The Government of Indias capital outlay has risen sharply, by nearly 89%, from Rs.5.92 lakh crore in FY22 to a budgeted Rs.11.21 lakh crore for FY26, reflecting a clear policy emphasis on harnessing the strong multiplier effects of infrastructure investment on the broader economy⁶. Over the past decade, public capital expenditure has been a key driver. Each rupee spent has generated an estimated 2.5 to 3.5 times GDP impact⁷. The Government has consistently increased spending to support investment, employment and economic activity.

Institutions such as the National Investment and Infrastructure Fund (NIIF) and the National Bank for Financing Infrastructure and Development (NaBFID) continue to mobilise domestic and global capital. This evolving landscape has been further reinforced by the increasing role of Infrastructure Investment Trusts (InvITs), which are facilitating greater participation of long-term institutional capital in infrastructure assets. Collectively, these mechanisms are helping to mitigate systemic risks by easing asset-liability mismatches on bank balance sheets, while strengthening the sustainability and depth of financing for long-gestation infrastructure projects, supporting asset monetisation, and enabling the recycling of capital into new developments.

Road and Highway Sector⁸

Indias roads and highways sector continues to serve as a foundational pillar of the countrys infrastructure-led growth strategy, playing a critical role in enhancing connectivity, facilitating trade, and supporting overall economic development. With a network exceeding 6.37 million kilometres, India maintains the second-largest road network globally, comprising approximately 1,46,572 km of national highways and 1,78,749 km of state highways.

The sector has witnessed significant expansion and modernization over the past decade. The development of National High-Speed Corridors (HSC)/ Expressways has accelerated considerably, increasing from 93 km in 2014 to 3,052 km currently. Length of 4 lane and above NH network (including Access controlled HSCs/Expressways) has increased by 2.6 times from 18,371 km in 2014 to 48,568 km at present. In parallel, the share of less than 2-lane NHs has decreased from 30% in 2014 to 9% of the total NH network, indicating a decisive shift towards higher-capacity, corridor- led development.

The pace of national highway construction has also improved markedly, increased ~2.4 times to 29.2 km per day (202425) from 12.1 km per day (2014-15). reflecting enhanced execution capabilities and policy support.

Between FY 2013-14 and FY 2024-25, the sector experienced robust growth in project activity, with work awards for national highways increasing by 108% and construction activity expanding by 150%. Concurrently, capital expenditure (including private investment) by the Ministry of Road Transport & Highways (MoRTH) have grown 6.4 times, from ~ Rs.53,000 crore in FY14 to ~ Rs.3.38 lakh crore in FY25, reflecting a sustained and significant expansion in highway sector investments.

National highways play a vital role in long-distance connectivity. NHAI, during the Financial Year 2025-26, constructed 5,313 km of National Highways, which is about 15% higher than the target of 4,640 kms for the year. The governments increased emphasis on PPP framework has improved execution efficiency and capital utilisation⁹.

Road transport continues to dominate Indias mobility landscape, accounting for approximately 78% of passenger movement and 66% of freight transport¹⁰. At the same time, digital transformation is reshaping the sector. Electronic toll collection, real-time monitoring and AI-based maintenance are enhancing operational performance. Sustainability remains a priority through adoption of green construction practices, recycled materials, and energy-efficient technologies across the highway sector.

Toll collections increased to Rs.82,342 crore, reflecting strong economic activity and continued infrastructure expansion. Growth has been driven by higher traffic volumes, expansion of toll roads and improved digital tolling systems. FASTag transactions rose to approximately 47,817 lakhs during the year, indicating wider adoption and smoother traffic flow¹¹.

Government support remains robust, with increased allocations for national highways, expressways and access- controlled corridors. Funding is being supported through public expenditure, toll revenues and asset monetisation. Continued investment in logistics infrastructure and last-mile connectivity underscores the focus on strengthening the road network.

Outlook for Roads and Highway Sector ¹²

Aligned with the Viksit Bharat 2047 vision, the Ministry of Road Transport and Highways aims to improve logistics efficiency on National Highways to global standards. The focus is on not just building roads but shaping corridors that serve as engines of industrial growth, urban expansion, digital connectivity, and citizen well-being. In addition, the emphasis is not only to improve safety but also to tackle chronic issues in road projects such as land acquisition challenges, urban traffic congestion, poor last mile connectivity, and cost overruns.

The sector is gradually shifting from expanding to efficiency and quality enhancement. Freight speeds have increased to around 50 km/hr on high-speed corridors, with a target of 70-75 km/hr. Further, the Ministry is also prioritising the development of High-Speed Corridors (HSCs) to improve freight movement and reduce congestion.

The Government has outlined an ambitious pipeline for access-controlled high-speed corridors (HSCs) and expressways, targeting the operationalisation of ~18,000 km by FY29 and award of ~26,000 km by FY33, providing strong visibility on long-term project flow and capital deployment across the highway sector. Development is being strategically prioritised towards urban decongestion and economic corridor efficiency, with a focused rollout of ring roads and bypasses for cities with populations exceeding 0.5 million, alongside enhanced connectivity to key logistics and growth nodes.

In addition, the transition to barrier-free tolling through ANPR-based systems, integrated with FASTag, in the year 2025 has seen further people-centric reforms and innovations have made highway travel even smoother and more efficient. The FASTag annual pass launched on August 15, 2025, has not only reduced daily travel costs but has also made regular commutes stress free, a testament to the fact that affordability and convenience can go hand in hand.

Work is underway to upgrade ~25,000 km of two-lane highways to four-lane standards, significantly enhancing capacity, safety, and throughput across key corridors. In parallel, a Rs.2 lakh crore port connectivity programme is being implemented to ensure seamless linkage of all major ports with the National Highway network.

Sectoral revenue is projected to grow from Rs.55,000 crore to Rs.1.4 lakh crore over the next two years. Simultaneously, the expansion of two-lane roads into four lanes is expected to improve logistics and reduce costs¹³.

Highway upgrades often mean inconvenience. Recognizing this, MoRTHs updated rule ensures that when a road is being upgraded from 2 lanes with paved shoulders to 4, 6, or more lanes, users need to pay only 50% of the earlier toll until the work is completed. This reflects MoRTHs commitment to improving road quality while upholding transparency and accountability, ensuring that during construction commuters are not overcharged and that travel remains fairer and easier on peoples pockets¹⁴-

Overall, continued capital investment, expansion of highspeed corridors, integration under PM Gati Shakti, and improve project execution is expected to strengthen capacity and reliability across the network.

Government Initiative Bharatmala Pariyojana

The government has significantly increased investment in the roads sector through programmes such as Bharatmala Pariyojana, aimed at expanding national highways and improving logistics efficiency.

Under Phase I, projects covering 26,425 km have been awarded, of which 21,597 km have been constructed. The government aims to complete the remaining approximately 4,200 km of highways under the programme by the end of FY 2067-27¹⁵.

The status of various components of Bharatmala Pariyojana

Component	Length (km)	Completed up to 30.11.2025 (km)
Economic Corridors	8,737	6,896
Inter Corridor Roads	2,889	2,397
Feeder Roads	973	702
National Corridors	1,777	1,516
National Corridor Efficiency Improvement	824	767
Expressways	2,422	1,994
Border Roads & International Connectivity Roads	1,619	1,466
Coastal Roads	77	72
Port Connectivity Roads	348	154
Balance Road Works under NHDP	6,758	5,633
Total - Bharatmala	26,425	21,597

Asset monetisation

NHAIs National Highway asset monetisation programme has demonstrated strong and sustained progress, emerging as a cornerstone of highway financing in India. Between FY 201819 and FY 2025-26, the Authority has mobilised over Rs.1.70 lakh crore through a diversified mix of Toll-Operate-Transfer (TOT), InvITs (including both private and public platforms), and securitisation structures. This trajectory reflects the growing maturity of Indias asset monetisation framework and sustained investor confidence in National Highway assets. Monetisation momentum peaked in FY24, with collections exceeding Rs.41,000 crore, driven by robust participation in InvITs and TOT bundles. Notably, TOT has contributed over Rs.61,000 crore cumulatively, while InvITs and securitisation have attracted long-term institutional capital, including global investors. The consistent scaling of these instruments underscores a well-established asset recycling model, enabling the Government to unlock value from operational highways and reinvest proceeds into new infrastructure development, thereby reinforcing a virtuous cycle of growth in the sector¹⁶.

In a significant milestone towards achieving the asset monetisation target for FY 2025-26, NHAI has realised Rs.28,307 crores through a combination of Public InvIT, Private InvIT, and Toll-Operate-Transfer (TOT) model, including TOT Bundles 17 and 18. With bids received for TOT Bundle-19, which are under technical evaluation, NHAI is well poised to achieve the Government of Indias budgeted target of Rs.30,000 crore for the current FY 2025-26¹⁷. NHAI has identified 17 highway projects, aggregating 1,692 km across nine States, for asset monetisation in FY 2026-27¹⁸.

National Monetisation Pipeline 2.0¹⁹

Building on the success of the first Asset Monetization plan announced in 2021, NMP 2.0 has been announced for FY 2025-30, with a target to plow back capital of Rs.10 lakh crore into new projects. The program comprises the transfer of assets for a limited period, divestment of portions of listed entities to unlock additional capital, securitization of cash flows, or strategic commercial auctions. The main objective of NMP 2.0 is that proceeds are expected to be reinvested to support further investment and expansion of the transport network, including roads and highways.

The total asset monetisation target under National Monetisation Pipeline (NMP) 2.0 for FY 2026-30 is Rs.16.72 lakh crore, which includes a private sector investment of Rs.5.8 lakh crore and is over 2.6 times higher than the target under NMP 1.0. Out of this, the monetisation target for highways is Rs.4.14 lakh crore. This initiative provides a substantial pipeline of yield-generating assets for institutional investors, particularly through InvITs and TOT models, while enabling reinvestment into next-generation infrastructure corridors.

Asset Classes under Highways (NMP 2.0)

Asset Classes	Details (kms)
1. Stretches where the user fee is accruing to NHAI	12,000 kms
2. Under construction stretches where the user fee will accrue to NHAI	4,700 kms
3. Projects at the end of their concession periods	2,500 kms
4. Project to be awarded under DBFOT (Toll) mode	2,100 kms

Source: NITI Aayog

These projects are spread across India, with major developments in states such as Andhra Pradesh, Bihar, Gujarat, Kerala, Maharashtra and Punjab. Key projects for monetisation include the Delhi-Amritsar-Katra Expressway, Gurgaon-Kotputli- Jaipur Bypass, and the Amritsar-Jamnagar Highway.

PM Gati Shakti National Master Plan ²⁰

The PM Gati Shakti National Master Plan focuses on integrated, multimodal connectivity infrastructure planning.

Under this framework, 352 projects with an estimated cost of Rs.16.10 lakh crore have been evaluated. Of these, 201 projects have been sanctioned and 167 are under implementation.

PM Gati Shakti - Roads Sector MoRTH

Opportunities

Road building in India is the second least expensive in Asia.

India has joined a global alliance of 15 countries, which will work towards the ethical use of smart city technologies.

Opportunities		Description
Green Hydrogen Infrastructure on National Highways		India is focusing on green hydrogen fuel infrastructure along national highways as the next step in its transport strategy. The Ministry of Road Transport and Highways (MoRTH) will launch a pilot project worth Rs.600 crore (US$ 68.64 million) on 10 selected highway stretches. This initiative aims to evaluate the feasibility of green hydrogen supply for commercial vehicles and establish standards for fuelling and storage systems21.
Large- Scale Government Infrastructure Programmes:	m	Flagship initiatives such as Bharatmala Pariyojana (including the subsumed NHDP), SARDP-NE, the LWE Road Development Programme, and Externally Aided Projects continue to drive highway development across regions. These programmes ensure a sustained pipeline of operational and near-operational assets, supporting long-term portfolio growth.
Rapid Growth in HighSpeed Corridors	A	The sharp increase in access-controlled expressways from 93 km in 2014 to over 3,052 km represents a transformational shift in Indias road infrastructure. These high-quality assets typically demonstrate superior traffic flow and revenue potential, presenting attractive opportunities for stable and scalable toll-based investments22.
Revamped PPP Framework and Concession Models		Ongoing updates to Model Concession Agreements (MCAs), including the revitalisation of BOT and advancements in HAM and EPC frameworks, are expected to improve risk allocation and enhance private sector participation. This evolving framework increases the availability of bankable projects and investment opportunities.
Asset Monetisation Strategy	=n	The Government continues to deepen its asset recycling framework, with plans to monetise highway assets worth Rs.35,000 crore in FY27, as part of a sustained strategy to unlock capital and reinvest in new infrastructure development. The proposed programme includes the monetisation of approximately 28 National Highway stretches, reflecting a structured pipeline of operational, revenue-generating assets being brought to market. This builds on the strong momentum achieved over the past few years and underscores the Governments commitment to leveraging monetisation as a core financing tool to accelerate road sector expansion, enhance private sector participation, and ensure a continuous cycle of asset creation and value realisation.
Wayside Amenities		Over 700 Wayside Amenities (WSAs) are planned along National Highways. Of these, 510 have been awarded and 110 are operational.
(WSAs) Development		These WSAs offer investment opportunities for investors and businesses, are being included in upcoming greenfield highways and support the local economic development through job creation and promotion of regional products and handicrafts23.
Digital Transformation and Smart Infrastructure	$	Initiatives such as FASTag-based tolling, proposed ANPR-enabled barrier-free tolling, and platforms like the Bhoomi Rashi Portal enhance efficiency, transparency, and revenue assurance. Digital transformation supports better traffic management and improved financial performance of road assets.
Freight Corridor Development	a x	The Central Government has announced a new freight corridor from Dankuni (West Bengal) to Surat (Gujarat).This corridoris expected to enable efficient and environmentally sustainable cargo movement. It will also reduce logistics costs for industries in eastern India and improve connectivity between eastern and western markets.
Multi-Modal Logistics		Multi-Modal Logistics Parks (MMLPs) are emerging as key assets for monetisation, driven by increasing freight movement and demand for logistics services.
Parks (MMLPs) Development	0	The Ministry of Road Transport and Highways plans to develop these projects under the Design Build Finance Operate Transfer (DBFOT) model to attract private investment. Under NMP 2.0,15 MMLPs have been proposed. These projects are expected to enhance logistics efficiency and generate revenue for both Central and State Governments.

Challenges

• The roads and highways sector in India continues to face challenges related to land acquisition and project approvals, which often lead to delays and cost escalations. Large-scale projects also encounter funding constraints, necessitating innovative financing structures such as PPPs. In addition, inadequate road maintenance, urban traffic congestion, and environmental concerns affect operational efficiency and long-term sustainability.

• Road projects are subject to multiple statutory clearances, including environmental, forest, and railway approvals. These multi-stage processes often lead to delays in project commencement and execution, especially in ecologically sensitive or densely populated areas.

• The sector continues to depend heavily on budgetary support and borrowings, leading to rising leverage, particularly at NHAI. While monetisation has provided some relief, the need for diversified and sustainable financing sources remains critical.

• While policy reforms have improved the investment environment, private sector participation remains uneven, particularly in greenfield and high-risk projects. Risk allocation, traffic uncertainty, and legacy issues have constrained broader private capital inflows.

• Rising costs of key inputs such as steel, cement, and bitumen, along with fuel price volatility, have increased project costs and impacted contractor margins, often leading to renegotiations or delays.

• The sector has witnessed intensified competitive bidding, particularly under EPC and HAM models, with projects often awarded at significant discounts (10-25% below estimated costs). This "Ll-driven" bidding environment has led to margin compression and financial stress among contractors, with several projects facing delays or challenges in achieving financial closure. Heightened competition has also contributed to declining profitability and execution risks, as companies bid aggressively to secure shrinking order books.

• Elevated Sectoral leverage, coupled with dependence on monetisation structures, may impact long-term financing flexibility. Further, road Safety remains a critical operational and regulatory priority, requiring continuous investment in design, monitoring, and enforcement mechanisms. ^•

• Limited bidder participation in certain projects reflects a cautious industry segment and may impact project pipeline execution. Additionally, social resistance, encroachment issues, and urban congestion further impact project execution and asset utilisation.

Outlook

Indias roads and highways sector is transitioning from a phase of rapid network expansion to one focused on enhancing logistics efficiency, capacity, quality, and network optimisation. Sustained capital investment, coupled with the expansion of access-controlled high-speed corridors and multimodal integration under PM Gati Shakti, is strengthening the reliability and performance of the highway ecosystem.

This infrastructure-led transformation is critical to reducing logistics costs, easing congestion, and improving national connectivity, thereby supporting economic growth and reinforcing the sectors attractiveness for long-term investment. The Ministry of Road Transport and Highways (MoRTH) is focusing on both development and maintenance to ensure the traffic-worthiness of National Highways. This approach is expected to improve the quality and longevity of infrastructure assets. To enhance private participation in highway projects, contract frameworks such as BOT and HAM are being updated.

The recent government focus on large-scale infrastructure expansion and corridor-based development is expected to drive long-term growth. At the same time, the Governments push towards diversified financing mechanisms, including public-private partnerships (PPPs) and asset monetisation through InvIT and TOT models, continues to support capital formation. Notably, the National Highways Authority of India has actively raised significant funds through monetisation initiatives in FY 2025-26, reflecting the sectors evolving financing framework.

Further, a PPP project pipeline of 13,400 km, with an estimated cost of Rs.8.3 lakh crore, has been identified for development over the next three years²⁵.

Overall, Indias infrastructure financing ecosystem is evolving towards larger-scale and more efficient structures. The combination of public investment, institutional support and modern financing instruments is expected to sustain capital flows and support long-term, inclusive growth. Going forward, the sector is expected to benefit from continued government emphasis on logistics efficiency, economic corridor development, and digital initiatives. Increased focus on road safety, sustainability, and technology adoption is likely to improve operational efficiency.

Overview of the Business of the InvIT

Indias financial ecosystem has strengthened with the introduction of market-based structures that support efficient capital allocation and broader investor participation across infrastructure and real estate assets.

Introduced by SEBI in 2014, Infrastructure Investment Trusts (InvITs) enable investors to participate in large infrastructure assets that generate steady income. They also provide developers with access to household savings for project financing.

Road InvITs play an important role in monetising operational highway assets and facilitating capital recycling into new projects. These structures channel long-term capital into the sector while improving asset utilisation. Out of Indias 3.25 lakh km of national and state highways, approximately 15,700 km have been monetised through InvITs, representing about 4.8% of the total network.

The first public InvIT is expected to be launched in 2026, following cumulative monetisation of Rs.1.52 lakh crore through Toll-Operate-Transfer (ToT) and private InvITs²⁶ InvITs have emerged as an effective instrument for deploying long-term capital. They have attracted global investors and strengthened Indias infrastructure financing ecosystem.

In addition, Infrastructure Investment Trusts in India serve as a key vehicle for highway asset monetisation. Road InvIT assets under management (AUM) are projected to increase from Rs.2.46 lakh crore to Rs.5.45 lakh crore by FY 2030. With Vision 2047 targeting an expansion of the national highway network to over 2 lakh km, the pool of assets available for monetisation is expected to grow significantly. This indicates potential for future capital mobilisation²⁷.

IRB InvIT Fund is a trust established under the Indian Trusts Act, 1882. It is registered with SEBI as an Infrastructure Investment Trust (InvIT) under the 2014 regulations. The trust is sponsored by IRB Infrastructure Developers Limited, one of the largest infrastructure development and construction companies in India in the roads and highways sector in terms of net worth.

The Trusts primary objective is to own, operate and maintain a portfolio of ten revenue-generating highway assets that includes eight BOT assets and two HAM assets with 4,445 lane kms and an enterprise value of ~ Rs.182,500 million, in the states of Maharashtra, Gujarat, Rajasthan, Karnataka, Tamil Nadu, Punjab, Haryana & Uttar Pradesh. The roads are operated and maintained pursuant to concessions granted by the National Highways Authority of India (NHAI).

Acquisitions

Asset Category	Project Details	Strategic Impact
3 BOT Asset	Hapur-Moradabad (NH-24) in Uttar Pradesh, Kaithal-Rajasthan Border (NH-152) in Haryana and Kishangarh- Gulabpura (NH-79) in Rajasthan.	The acquisition of these assets has strengthened the Trusts geographic diversification. It has expanded the portfolio into two high-GDP states, Uttar Pradesh and Haryana.
1 HAM Asset	Delhi-Mumbai Package 7 - Gandeva Ena Hybrid Annuity highway	The acquisition has increased the Trusts asset base and provided stable annuity revenue over the concession period. It has improved long-term revenue visibility and strengthened distributable cash flow.

Distribution

As per the InvIT Regulations, not less than 90% of Net Distributable Cash Flows (NDCF) of each project SPV is required to be distributed to the Trust, in proportion to its holding, subject to applicable provisions of the Companies Act, 2013.

Further, the Trust is required to distribute at least 90% of NDCF to unitholders.

The distribution of NDCF has been made by the investment manager in accordance with the InvIT Regulations. Payments are required to be made within five working days from the record date. Since listing, the Trust has declared distributions on a quarterly basis and has consistently complied with the prescribed timelines under the InvIT Regulations.

For FY 2025-26, the NDCF of the Trust was INR 7,060.61 million, of which the Trust has distributed 99.94%. The total payout from the NDCF for FY 2025-26 was INR 6.60 per unit to the unitholders.

Statement of Net Distributable Cash Flows (NDCFs) of IRB InvIT Fund

		(Rs. in Millions)
Sr. Particulars No.	For the year ended March 31,2026	For the year ended March 31, 2025
1 Cash flows from operating activities of the Trust*	113.66	(198.74)
2 (+) Cash Flows received from SPVs representing distributions of NDCF, computed in accordance with the applicable framework	10,501.75	6,707.00
3 (+) Treasury income/income from investing activities of the Trust including interest income received from FD, any investment entities as defined in Regulation 18(5), tax refund, any other income in interest, profit on sale of Mutual funds, investments, assets etc., dividend income etc., excluding any Ind AS adjustments. Further clarified that these amounts will be considered on a cash receipt basis.	385.78	69.03
4 (+) Proceeds from the sale of infrastructure investments, infrastructure assets or shares of SPVs/Holdco/investment entities adjusted for the following:
• Applicable taxes, including capital gains tax
• Related debts settled or to be settled from such proceeds
• Directly attributable transaction costs
• Amounts reinvested or proposed to be reinvested in accordance with Regulation 18(7) of the InvIT
Regulations or other relevant provisions of the InvIT Regulations
5 (+) Proceeds from sale of infrastructure investments, infrastructure assets or sale of shares of SPVs or Investment Entity not distributed pursuant to an earlier plan to re invest as per Regulation 18(7) of InvIT Regulations or any other relevant provisions of the InvIT Regulations, if such proceeds are not intended to be invested subsequently
6 (-) Finance cost on Borrowings, excluding amortisation of any transaction costs as per Profit and Loss Account of the Trust	(3,644.65)	(1,411.14)
7 (-) Debt repayment at Trust level (to include principal repayments as per scheduled EMIs except if refinanced through new debt including overdraft facilities and to exclude any debt repayments/debt refinanced through new debt, in any form or funds raised through issuance of units)	(295.93)	(355.17)
8 (-) Any reserve required to be created under the terms of, or pursuant to the obligations arising in accordance with, any: (i). loan agreement entered with financial institution or (ii). terms and conditions, covenants or any other stipulations applicable to debt securities issued by the Trust or any of its SPVs/ HoldCos, or (iii). terms and conditions, covenants or any other stipulations applicable to external commercial borrowings availed by the Trust or any of its SPVs/ HoldCos, (iv). agreement pursuant to which the SPV/ HoldCo operates or owns the infrastructure asset, or generates revenue or cashflows from such asset (such as, concession agreement, transmission services agreement, power purchase agreement, lease agreement, and any other agreement of a like nature, by whatever name called); or (v). statutory, judicial, regulatory, or governmental stipulations;
9 (-) any capital expenditure on existing assets owned/leased by the InvIT, to the extent not funded by debt/equity or from contractual reserves created in the earlier years
10 NDCF at Trust Level (Refer note 2)	7,060.61	4,810.98

‘Excludes transaction related costs amounting to Rs.351.08 million funded out of proceeds from Institutional Placement.

Note

1. The Trust has considered the distribution of Rs. 270.92 million received from SPV after March 31,2026, but before finalisation

and adoption of accounts of the IRB InvIT Fund.

The Trust has considered the distribution of Rs. 298.92 million received from SPV after March 31,2025, but before finalisation and adoption of accounts of the IRB InvIT Fund.

2. As per the Master Circular SEBI/HO/DDHS-PoD-2/P/CIR/2025/102 dated July 11, 2025, details of NDCF distributable are as below -

		(Rs. in Millions)
Particulars	For the yearended March 31,2026	For the year ended March 31, 2025
NDCF of Trust (A)	7,060.61	4,810.98
(+) NDCF of SPVs (B)	10,603.84	6,922.88
(-) Amount distributed by SPVs (C)	(10,501.75)	(6,707.00)
Amount Of NDCF Distributable D=(A+B-C)	7,162.70	5,026.86

The Trust has ensured that a minimum of 90% of the above amount is distributed as NDCF.

Factors affecting Operations

The business of Project SPVs prospects and results of operations and financial condition are affected by several factors, including the following key factors:

Traffic and Revenue

Toll revenue in BOT projects is dependent on toll rates and traffic volume. These are influenced by factors such as the location of the road, its economic significance and the availability of alternative routes. Traffic volumes may also be impacted by political or social events, including protests. However, the diversified asset portfolio mitigates the impact of such risks on any single project.

Operations and Maintenance

Failure to meet O&M and major maintenance (MM) obligations may result in termination of concession agreements by NHAI. Older SPVs operated under fixed-price O&M/MM contracts with IRBIDL until FY30. Newer assets have similar arrangements extending across the concession period, ensuring cost stability.

A Major Maintenance Reserve Account (MMRA) is maintained until FY28. However, higher-than-anticipated maintenance costs may impact debt servicing and remain a key risk.

Financial Review

Consolidated Financial Performance and Analysis: FY 2025-26 compared with FY 2024-25

			(Rs. in Millions)
Particulars	FY 2025-26	FY 2024-25	YoY Growth (%)
Total Income	15,817	11,102	42
EBITDA	12,697	9,162	39
Interest Cost	5,191	2,943	76
Depreciation	3,799	2,541	49
Profit After Tax	3,386	3,556	(5)

Critical Accounting Policies:

The preparation of financial statements in conformity with applicable accounting standards and the Companies Act, 2013 requires the Trust management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations at the end of the reporting period. By their nature, these judgements are subject to a degree of uncertainty. Although these estimates are based upon the best knowledge of the Trusts management of current events and actions, the actual results could differ from these estimates.

While all aspects of the financial statements should be read and understood in assessing their current and expected financial condition and results, the Trust believes that the following critical accounting policies warrant particular attention:

Intangible assets Toll Collection Rights:

• Toll collection rights are stated at cost net of accumulated amortisation and impairment losses.

• Toll collection rights awarded by the grantor against construction service rendered by the Project SPV on Design, Build, Finance, Operate, Transfer (DBFOT) basis, which consists of direct and indirect expenses on construction of roads, bridges, culverts, infrastructure and other assets at the toll plazas.

• Toll collection rights are amortised over the period of concession, using revenue-based amortisation as per exemption provided in Indian Accounting Standard (Ind AS) 101. Under this method, the carrying value of the rights is amortised in the proportion of actual toll revenue for the year to the projected revenue for the balance toll period, to reflect the pattern in which the economic benefits of the asset will be used. At each balance sheet date, the projected revenue for the balance toll period is reviewed by the management. If there is any change in the projected revenue from previous estimates, the amortisation of toll collection rights is changed prospectively to reflect any variations in the estimates.

• Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.

• Intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Premium Obligation

As per the service concession agreement, One of the SPVs is obligated to pay premium to NHAI over the concession period. This premium obligation has been capitalised as an intangible asset since it is paid towards getting the right to earn revenue by constructing and operating the roads during the concession period. Hence, total premium payable as per the service concession agreement is upfront, capitalised at fair value of the obligation at the date of transition.

Besides, gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset of the Trust and are recognised in the statement of profit or loss when the asset is derecognised.

Intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Amortisation

Toll collection rights are amortised over the period of concession, using revenue-based amortisation as per exemption provided in Ind AS 101. Under this method, the carrying value of the rights is amortised in the proportion of actual toll revenue for the year to projected revenue for the balance toll period, to reflect the pattern in which the assets economic benefits will be consumed. At each balance sheet date, the projected revenue for the balance toll period is reviewed by the Trust. If there is any change in the projected revenue from previous estimates, the amortisation of toll collection rights is changed prospectively to reflect any changes in the estimates. The balance sheet of the Trust reflects premium deferral, being the premium payable net of payments made after adjusting for premium deferment, and this is presented under premium deferred obligation. Interest payable on the above is aggregated under premium deferral obligation.

Provisions

Generally, provisions are recognised when the Fund has a present obligation (legal or constructive) as a result of a past event. It is probable that an outflow of resources of economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation amount. When the Fund expects some or the entire provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss, net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Principal Components in the consolidated profit and loss Income items

The Project SPVs income consists of revenue from operations and other income. Revenue from operations primarily consists of income from toll collection, contract revenue, interest on annuity and O&M receipt. Further, during the concession period of a project, the NHAI may ask the Project SPVs to carry out utility shifting work (which is incidental to the construction of the toll road and typically involves the shifting of utilities that are located at the construction site) or may award the Project SPVs additional scope of work that is separately paid by the NHAI. Revenue from such utility shifting or change in scope contract and the sale of materials, among others, also forms part of the Project SPVs operating revenue. However, this is not significant as compared to toll revenue.

The term other income includes interest income on bank deposits, interest on an income tax refund, interest unwinding on loan given, dividend income, gains on sale of property, plant and equipment, gain on sale of investments and certain miscellaneous income. Other income also includes any gain on sale of investments and fixed assets.

Expense items

Expenses are made up of: (i) road work and site expenses, (ii) employee benefits expense and (iii) depreciation and amortisation expenses, (iv) finance cost and (v) other expenses.

Road work and site expenses

This expenditure includes contract expenses relating to utility shifting or change in scope contracts, operation and maintenance expenses, road works expenses, cost of material, independent engineer fees, sub- contracting and security expenses and site and other direct expenses.

Employee benefits expenses

This nomenclature includes salaries, wages and bonus paid to the employees, contribution towards provident fund and other funds, gratuity expenses and staff welfare expenses.

Depreciation and amortisation

Depreciation and amortisation account shows depreciation on property, plant and equipment and amortisation of intangible assets of the Trust.

Finance costs

Finance costs include interest on loans from banks/ financial institutions, interest on premium deferment, unwinding of discount on provision of MMR and other borrowing costs (including unamortised transaction cost).

Otherexpenses

The day to day working of the Trust involves a number of administrative expenses which are listed as other expenses. These include various administrative costs such as power and fuel costs, rent, rates and taxes, water charges, repairs and maintenance, travel and conveyance expenses, vehicle expenses, printing and stationery expenses, director sitting fees, advertisement expenses, legal and professional expenses, Auditor remuneration, bank charges, insurance, Corporate Social Responsibility and other miscellaneous expenses.

Human Resource

The human resource development is a continuous and strategic process. This is reflected in its ongoing employee engagement initiatives and regular talent management reviews.

Risk Management

The opportunity in the business of toll collection is the upbeat traffic movement, which would help in improving the toll collection and thereby increase the return to the unit holders. However, a key risk the Trust faces is the potential slowdown or diversion of traffic. Such developments may adversely impact toll revenues. To mitigate this risk, the Trust has incorporated safeguards in the concession agreement with NHAI. These safeguards provide for compensation mechanisms, either through cash reimbursement or extension of the concession period, thereby protecting the Trust from potential revenue losses.

Internal control and systems

IRB InvIT has a strong internal control system to manage its operations, financial reporting and compliance requirements. The investment manager has clearly defined roles and responsibilities for all managerial positions. All the business parameters are regularly monitored and effective steps are taken to control them. Regular internal audits are undertaken to ensure that responsibilities are executed effectively. The audit committee of the Board of Directors of Investment Manager periodically reviews the adequacy and effectiveness of internal control systems and suggests improvements to further strengthen them.

Procedure for Dealing with Related Party Transactions

In accordance with relevant provisions of the InvIT Regulations, all related party transactions are on an arms- length basis, in compliance with applicable accounting standards and any other guidelines issued by the SEBI from time to time. The Investment Manager ensures that related party transactions are in the best interest of the unitholders and conform to the strategy and investment objectives of the Trust.

Approval of the Unitholders

In the case of related party transactions, an approval from unitholders shall be obtained in the manner specified under Regulation 22 of the InvIT Regulations (where the votes cast in favour of a resolution shall be more than the votes cast against such resolution) before entering into any such subsequent transaction if:

a. The total value of all the related party transactions in a financial year concerning the acquisition or sale of assets, whether directly or through a holding company or through an SPV, or investments into securities exceeds 5% of the value of the Trust Assets; or

b. The value of the funds borrowed from related parties, in a financial year, exceeds ten per cent of the total consolidated borrowings of the Trust, the holding company and the SPVs.

For any issue requiring unit holder approval, including those related to Regulations 18, 19 and 21, the votes cast in favour of the resolution must be at least sixty per cent of total votes cast for the resolution. Importantly, voting by any person who is a related party in such a transaction, as well as their associates, shall not be considered on that specific issue.

Cautionary Statement

The terms ‘IRB InvIT and ‘the Trust are interchangeably used and mean IRB InvIT and its Project SPVs as may be applicable.

This annual report contains certain forward-looking statements and may contain certain projections. These forward-looking statements generally can be identified by words or phrases such as ‘aim, ‘anticipate, ‘believe, ‘expect, ‘estimate, ‘intend, ‘objective, ‘plan, ‘project, ‘will, ‘will continue, ‘will pursue, ‘seek to or other words or phrases of similar import. Similarly, statements that

• the general transportation industry environment and traffic growth; and

• regulatory changes and future Government policy relating to the transportation industry in India.

By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated. Forward-looking statements and projections reflect current views as of the date hereof and are not a guarantee of future performance or returns to investors. These statements and projections are based on certain beliefs and assumptions that in turn are based on currently available information.

Although the investment manager believes that the assumptions upon which these forward-looking statements and projections are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements and projections based on these assumptions could be incorrect. None of the Trust, the trustee, the investment manager and their respective affiliates/advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

There can be no assurance that the expectations reflected in the forward-looking statements and projections will prove to be correct. Given these uncertainties, readers are cautioned not to place undue reliance on such forwardlooking statements and projections and not to regard such statements to be a guarantee or assurance of the Trusts future performance or returns to investors.