1. Industry Review
Indias infrastructure opportunity
Indias firm resolve to increase its current $3.7 trillion economy to a $30-35 trillion economy by 2047, necessarily requires that our infrastructure sector is, a key driver to propel the country economic growth, should be of the world class. Growing urbanization increasing population, growing disposable income, increasing, demand for energy and financing needs for sustainable living pose a challenge for the infrastructural setup to be modern and upto the expectation of the citizen. Lack of adequate infrastructural facility is the main primary growth constraint, while good infrastructure is widely recognized as an enabler of economic growth. In the coming era of supply chain disruptions, new technologies and reversal of financial deleveraging, infrastructure growth must keep pace with the need created for it.
The Government of India has taken several reforms and initiatives and given a significant push for capital expenditures for key infrastructure sectors, especially highways. The total allocation for the highways sector has increased to Rs2.87 lakh crore from Rs 2.78 lakh crore in the Union Budget for Financial year 2025-26. (Out of the total Rs 2.87 lakh crore, the National Highways Authority of India (NHAI) has been allocated around Rs
1.70 lakh crore as part of MoRTHs capital expenditure plan for 2025-26, a 1.19 % increase from 2024-25) (Source: Government of India, Ministry of Finance, Union Budget 2025-26). This substantial investment underscores the importance placed on enhancing the nations transportation infrastructure, which is crucial for boosting trade and connectivity.
Road and Highway sector
India has the second-largest road network in the world, spanning a total of 6.7 million kilometers (kms). Being the most preferred mode of transportation, the road network transports 64.5% of all goods in the country and 90% of Indias total passenger traffic. As of January
2025, the total length of National Highways in the country is 146,195 km. Road transportation has been gradually increasing over the years with improvement in connectivity between cities, towns and villages in the country.
India aims to accelerate the development of its national highways, including high-speed access-controlled routes, to establish a world-class road network by 2047 as part of its goal to transition into a Developed Nation by 2047. The plan involves expanding the national highways network to over 2,00,000 kilometers, with a significant increase in access-controlled highways to 50,000 kilometers from the current 4,000 kilometers within the next 13 years. Additionally, the government aims to reduce road accidents by 95% over the next 25 years.
According to the MoRTH, Financial Year 2024-25 was the year of consolidation of the gains that accrued from major policy decisions taken in the previous ten years, a time for monitoring of ongoing projects, tackling roadblocks and adding to the impressive pace of work achieved during the past years. During the year, the MoRTH and its associate organizations have expanded the national highways network in the country, taking various steps to make these highways safe for the commuters and undertaking effective steps to minimize adverse impact on the environment. As a result, over the last ten years, length of National Highways has gone up by 60 % from 91,287 km in 2014 to 1,46,195 km.
(Source: MoRTH press release titled "Year End Review
2024 Ministry of Road Transport and Highways" dated January 9, 2025 and MoRTH Annual Report 2024-25).
The length of 4-laned National Highways including National High-Speed Corridors (HSC) has increased by 2.63 times, from 18,371 km in 2014 to 48,241 km as of year ending 2024.
The award of Highway Projects during FY 2024-25 is
3,100 km (upto Dec.24) as compared to 8,581 km during complete FY 2023-24. The average pace of award during the period from 2014-24 is 11,017 km. The length of Highways constructed in 2024-25 is 5,852 km (upto Dec.24). Construction during 2023-24 reached 12,349 km which was 20% more than previous year. The highest achievement was 13,327 km in 2020-21. The decline in highway construction during the year 2024-25 was due to reduction in the pace of award of highway projects compared to previous years. The average pace of NH construction has also seen a remarkable increase, rising to 33.83 km/ day in 2023-24 from 12.1 km/day in 2014-2015.
Schemes
Bharatmala Pariyojana: This is the umbrella program for the highways sector that aims to optimize the efficiency of road traffic movement across the country by bridging critical infrastructure gaps. The Phase I of the Bharatmala Pariyojana approved in October 2017, focuses on development of 34,800 km of National
Highways. The Pariyojana emphasized on a "corridor based National Highway development" to ensure infrastructure symmetry and consistent road user experience. The key components of the Pariyojana are Economic Corridors development, Inter-corridor and feeder routes development, National Corridors Efficiency Improvement, Border and International Connectivity Roads, Coastal and Port Connectivity Roads and Expressways. The Bharatmala Pariyojana phase 1 is to be completed by FY 2027-28. Around
34,800 km of National Highway length was planned for development under Phase-I of Bharatmala Pariyojana. As of Feb, 2025, 26,425 km (i.e., 76% of 34,800 km) have been awarded for construction out of which 19,826 Km i.e. 75% have been already constructed.
Under the Bharatmala Pariyojana, 60% projects have been envisaged on Hybrid Annuity Mode (HAM), 10% projects on BOT (Toll) Mode, and 30% projects on EPC mode.
Pradhan Mantri (PM) Gati Shakti National Master Plan (NMP): The seven engines that drive PM Gati Shakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure. The scope of PM Gati Shakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency. The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM Gati Shakti framework. PM Gati Shakti National Master Plan is a critical tool for integrating economic & infrastructural planning and development (Source: National Master Plan (pmgatishakti.gov.in)). With multimodal infrastructure development, Indias logistics cost will reduce further, improve ease of living and ease of doing business in the country. The main aim of this program is to fasten the approval process which can now be done through the Gati Shakti portal and thus digitized the approval process completely.
National Electronic Toll Collection (FASTag) programme: the flagship initiative of MoRTH and NHAI has been implemented on pan India basis to remove bottlenecks and ensure seamless movement of traffic and collection of user fee as per the notified rates, using passive Radio Frequency Identification (RFID) technology which is made compulsory with effect from February 15, 2021. The implementation of the FASTag system for toll collection in India has been a resounding success, with a consistent growth trajectory.
The average daily revenue collected from tolls through the use of FASTag on NH Fee plaza is around Rs 193 crore during FY24-25 (till Nov 2024) v/s Rs 147.31 crore during FY 23-24 (till Nov. 2023). The Number of Average daily ETC transaction on NH fee plaza is Rs118.82 Lakhs in F.Y. 24-25 (Till Nov 2024) v/s Rs86.61 Lakhs in F.Y. 23- 24 (Till Nov 2023). (Source: MoRTH press release titled
"Year End Review 2024: Ministry of Road Transport and
Highways" dated January 09, 2025) and MoRTH press release titled "Year End Review 2023: Ministry of Road
Transport and Highways" dated January 05, 2024).
The Financial Year Wise ETC FASTag Collection (In Rs Crore) for NH, MoRTH, SH Toll Plazas for FY25 is Rs 72,390 Cr. v/s Rs 64,594 Cr. and ETC FASTag Transaction
(In Lakhs) for NH, MoRTH, SH Toll Plazas for FY 24-25 Rs 41,638 vs Rs 38,152 for FY 23-24. (Source: https://ihmcl. co.in/etc-transaction-reports/). The constant growth and adoption of FASTag by highway users is very encouraging and has helped increase efficiency in toll operations.
Growth Drivers
To accelerate the pace of construction, several initiatives have been taken by the government to revive the stalled projects and expedite completion of new projects: Identification of Model National Highway in the state for development by the Government.
Streamlining of land acquisition and acquisition of major portion of land prior to invitation of bids.
Award of projects after adequate project preparation in terms of land acquisition, clearances etc.
Disposal of cases in respect of Change of Scope (CoS) and Extension of Time (EoT) in a time bound manner. Procedure for approval of General Arrangement Drawing for ROBs simplified and made online. Close coordination with other Ministries and State Governments.
One-time fund infusion Regular review at various levels and identification/ removal of bottlenecks in project execution.
Proposed exit for Equity Investors
Securitization of road sector loans
Disputes Resolution mechanism revamped to avoid delays in completion of projects.
Mandatory Electronic toll collection through FASTag with effect from February 15, 2021.
For faster settlement of claims through conciliation and reduce liabilities, NHAI has rigorously started the process of conciliation by constituting three Conciliation Committees of Independent Experts (CCIE) of three members each.
In addition, the following initiatives will also add up to drive growth for the infrastructure sector in India:
Massive infrastructure push: The Union Budget has given much-needed impetus to infrastructure development which could reduce trade and transaction costs and improve factor productivity. Moreover, the focus on roads and railways will create a unified market in India for seamless movement of goods and human resources. The Government of India has given a massive push to the infrastructure sector. The Union Budgets are continuously giving an investment push to lift economic growth, for this fiscal, the governments revenue expenditure is budgeted to grow less than 1% after growing 2.7% in the previous fiscal. The total capex of the government (budgetary capex plus revenue grants for capital creation and capex by central public sector enterprises) is budgeted to rise 14.5% as compared with only 3.1% in the current fiscal. Hence, the government has tightened the belt around revenue expenditure and frontloaded infrastructure spending, which would lead to faster economic growth.
NH expansion: The Gati Shakti program has consolidated a list of 81 high impact projects, out of which road infrastructure projects were the top priority. The major highway projects include the Delhi-Mumbai expressway (1,350 kilometres), Amritsar-Jamnagar expressway (1,257 kilometres) and Saharanpur- Dehradun expressway (210 kilometres). The main aim of this program is to give faster approval and is done through the Gati shakti portal and digitized the approval process completely.
Growing demand: With the increase in consumer demand and nuclear families, need for two-wheelers and compact cars has been on the rise and is expected to grow even further. The market for roads and highways in India is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing government initiatives to improve transportation infrastructure in the country.
Government initiatives:
The road networks enhancement also includes green initiatives, such as utilizing recycled materials and integrating eco-friendly technologies. Additionally, technological advancements are set to redefine Indias highway transportation landscape, with the likely adoption of Global Navigation Satellite System (GNSS)- based tolling systems and the integration of IoT, AI, and GIS in road infrastructure, the toll collection will become seamless.
The major initiatives undertaken by the Government such as National Infrastructure Pipeline (NIP) and the PM Gati Shakti National Master Plan will raise productivity and accelerate economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass
Transport, Waterways, and Logistics Infrastructure. All seven engines will pull forward the economy in unison. The projects pertaining to these 7 engines in the NIP will be aligned with PM Gati Shakti framework. The major initiatives undertaken by MoRTH are described under:
1. MORTH, through its implementing agencies NHAI/ NHLML and NHIDCL has kept pace with the work of implementing of 35 Multi-Modal Logistics Parks (MMLPs) Projects identified for development under Bharatmala Pariyojana - Phase I.
2. MoRTH developed a comprehensive Port Connectivity Masterplan to ensure adequate last-mile connectivity to all the operational/UI ports in the country. As part of the Masterplan, connectivity requirements of all the operational and under implementation ports were assessed and connectivity projects were identified. The 59 projects (1,249 km) will be taken up under PM Gati Shakti National Master Plan for improving last mile connectivity to ports in the country.
3. To improve the comfort and convenience of the highway users, the Ministry has planned development of state-of-the-art Way Side Amenities (WSA) at approximately every 40 kms along the National Highways.
4. Launch of Surety Bond Insurance: MoRTH launched
Indias first-ever Surety Bond Insurance product from Bajaj Allianz on December 19, 2022. With this new instrument of Surety Bonds, the availability of both liquidity and capacity will be boosted, and the infrastructure sector will be strengthened.
5. To ensure seamless movement of traffic through fee plazas and increase transparency in collection of user fee using FASTag, the National Electronic Toll Collection (NETC) programme, the flagship initiative of MoRTH, has been implemented on pan-India basis. FASTag implementation has also reduced the wait time at National Highway fee plazas significantly, resulting in enhanced user experience. In order to ensure that the payment of fees at Toll Plazas is through Electronic means only and vehicles pass seamlessly through the Fee Plazas, the FASTag drive has been very well supported by the highway users as it has achieved over 95% penetration with more than three crore users in the country.
6. Green Highways Policy 2015 was adopted to develop eco-friendly National Highways with participation by the community, farmers, NGOs, private sector, institutions, government agencies, and the Forest Department for the countrys economic growth and development.
7. MoRTH brought out changes in the Model Concession Agreement (MCA) & Request for Proposal (RFP) of the Road Construction Models such as HAM and BOT (Toll).
i) Much needed changes have been made in the relevant clauses of the model RFP and MCA of the HAM project to allow the Lowest Quoted Bid Project Cost (BPC) as the basis for awarding the HAM Project and O&M cost to be fixed as being done in EPC projects. It will now bring out the winner immediately after the opening of financial bids in a transparent manner as in EPC mode of bidding.
ii) Changes have been made in the relevant clauses of the Model Concession Agreement of the BOT (Toll) project permitting the change of ownership from existing 2 years to 1 year after the Commercial Operation Date (COD). This move will free the equity/funds of construction companies for taking up other projects.
8. In November 2020, the MoRTH in modified the change in ownership clause in the Hybrid Annuity Mode ("HAM") projects and permitted the bidders/ consortium members to dilute their equity after a period of six months from the commercial operations date ("COD"). Prior to the relaxation, the concessionaire/bidders/consortium members had to retain their equity for a period of two years from COD. Further, MoRTH in May 2022 approved changes in the model concession agreements of Build-Operate-Transfer projects and permitted the change of ownership from the existing two years to one year after COD/issuance of completion certificate and completion of punch list items.
Increasing investments: With the Government permitting 100% Foreign Direct Investment (FDI) in the road sector, several foreign companies has formed partnerships with Indian players to capitalise on the sectors growth.
Opportunities
The roads and highways sector has pioneered several innovative public-private partnership (PPP) models besides having a strong contractual framework compared with other sectors. These factors have led to significant investments from private players in the sector. Several incentives have also been announced by the Government to attract private sector participation and foreign direct investment, which include Government bearing the cost of project feasibility study, land for the right of way and way side amenities, shifting of utilities, environment clearances, etc.100% FDI in roads and highways is allowed under automatic route. The following few initiatives taken by the Government of India make the sector attractive for investment for the private players, namely:
Electronic toll collection: National Electronic Toll Collection (FASTag) programme, the flagship initiative of MoRTH and NHAI has been implemented on pan India basis for ensuring seamless movement of traffic and collection of user fee as per the notified rates, using passive Radio Frequency Identification (RFID) technology since 2021 adding certainty to the toll collection figures.
Different models: Public-Private Partnership (PPP) models used in road projects are Build Operate Transfer (BOT) toll, TOT and HAM (Hybrid Annuity Model). The government of India keeps on innovating new, flexible policies to create investor-friendly highway development initiatives. By permitting monetization of highway assets under TOT mode and reviving the BOT model, the Government has provided an impetus to the highway infrastructure to be more investment- friendly and attractive for private partnerships. This will not only strengthen the road infrastructure but will have a ripple effect that will further strengthen the countrys economy, increase employment opportunities, and reduce logistics cost.
Asset Monetization: The National Highways Authority of India (NHAI) has drawn up an ambitious plan to monetize 24 operational highway stretches of total length of 1,472 kms in the Financial Year 2025-26 through TOT mode to beef up resources for its road building program.
Other favourable policies: These include 100% exit policy for stressed BOT players, providing secured status for PPP projects while lending, and proposal to scrap slow-moving highway projects, among others.
Outlook
Indias infrastructure sector is rapidly growing and the key trends demonstrate positivity and optimism. The market for roads and highways in India is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing Government initiatives to improve transportation infrastructure in the country. For the period of 2016-17 to 2021-22, the CAGR stands at 20%.
Development and maintenance of road infrastructure is a key Government priority, the sector has received strong budgetary support over the years. During the past years, the standardized processes for Public Private Partnership & public funded projects and a clear policy framework relating to bidding and tolling have also been developed. The major initiatives undertaken by the Government such as National Infrastructure Pipeline (NIP) and the PM Gati Shakti National Master Plan will raise productivity and accelerate economic growth and sustainable development.
Viksit Bharat @ 2047 is the vision of the Government of India to make India a developed nation by 2047. In line with the objective, the MoRTH is set to embark on an ambitious plan to construct 50,000 km of high- speed (access-controlled) corridors by the year 2047 The highways sector in India has been at the forefront of performance and innovation. The government is committed towards expanding the National Highway network over 2 lakh kilometers by 2047 emphasizing the construction of the World Class Road infrastructure in time bound & target oriented way.
India has a well-developed framework for Public- Private-Partnerships (PPP) in the highway sector. The Asian Development Bank ranked India at the first spot in PPP operational maturity and also designated India as a developed market for PPPs. The Hybrid Annuity Model (HAM) has balanced risk appropriated between private and public partners and boosted PPP activity in the sector. In the recent past, the Build Operate Transfer (BOT) projects have witnessed renewed interest from private players, therefore NHAI has come out with more tenders on BOT mode in the current fiscal year. NHAI has identified 53 highway projects worth Rs 2.1 trillion to be developed through BOT model.
Asset recycling, through the Toll Operate Transfer (TOT) model has also been taken up by the NHAI and other State Government agencies is garnering increased interest among the investors. Since its launch in 2018, NHAI has successfully completed 6 rounds of the Road Asset (bundle of roads) of monetization through TOT mode and raised Rs 26,366 crores. NHAI plans to monetise 24 operational highway stretches of total length of 1,472 kms in the FY 2025-2026 through TOT mode. In the current FY 2024-25, NHAI has awarded only two TOT Bundles as against four TOT Bundles in FY 2023-24 for a monetized value of Rs 8353 Cr. as against Rs15,968 Crore in FY 2023-24. With this, MoRTH and NHAIs Total Asset Monetization Program has crossed Rs1 Lakh Crore ( Rs 42,334 Crore through TOT, Rs 26,125 Crore through InvIT and Rs 42,000 Crore through Securitization).
To improve the comfort and convenience of the highway users, the Ministry has planned development of state- of-the-art Way Side Amenities (WSA) at approximately every 40 kms along the National Highways. A total of 700+ WSAs were planned to be awarded along the National Highways by FY 2025-26. 322 WSAs have already been awarded of which 162 WSAs were awarded in FY 2023-24. Out of 322 WSAs, 83 sites are operational.
A network of 35 Multimodal Logistics Parks ("MMLPs") is planned to be developed as part of Bharatmala Pariyojana, with a total investment of about Rs 46,000 crore, which once operational, shall be able to handle around 700 million metric tonnes of cargo. Of this, MMLPs at 15 prioritized locations will be developed with a total investment of about Rs 22,000 Crore. These MMLPs shall serve as regional cargo aggregation and distribution hubs for various industrial and agricultural nodes, consumer hubs and EXIM gateways such as seaports with multi-modal connectivity. In certain cases, the MMLPs are also being developed in tandem with the Inland Waterway Terminals under the Sagarmala Pariyojana to further reduce the cost of inland cargo movement at a much larger scale as compared to conventional road-based movement.
India currently has 87 operational and under implementation ports along its coastline. All major operational ports currently have 4 lane and above last mile road connectivity. MORTH and its implementing agencies have planned the development of 108 Port Connectivity Road (PCR) projects of length ~3,700 km to improve the last mile connectivity of all 87 operational and under implementation ports.
Under Parvatmala Pariyojana, ropeway projects of ~60 km length are planned for award by FY 2023-24. Out of these, Ropeway at Varanasi (Uttar Pradesh) of 3.85 km is under construction. Additionally, 05 ropeway projects of 8.18 km length are awarded and the bids are invited for balance 53.28 Km. Ropeways have emerged as a convenient, safe and preferred mode of transportation to provide both, first as well as last mile connectivity to such hilly & inaccessible areas or to help de-congest urban congestion areas.
The highways sector in India has been at the forefront of performance and innovation. The government is committed towards expanding the National Highway network to 2 lakh kilometres by 2025 emphasizing the construction of the World Class Road infrastructure in time bound & target oriented way. India has a well- developed framework for Public-Private-Partnerships (PPP) in the highway sector. The Asian Development Bank ranked India at the first spot in PPP operational maturity and also designated India as a developed market for PPPs. The Hybrid Annuity Model (HAM) has balanced risk appropriated between private and public partners and boosted PPP activity in the sector. In the recent past, the BOT projects have witnessed renewed interest from private players, therefore it is envisaged that the NHAI may come out with more tenders on BOT mode in the coming year. Asset recycling, through the TOT model has also been taken up by the NHAI and other State Government agencies.
2. Overview of the Business of the InvIT
IRB InvIT Fund is the Trust settled by its Sponsor, IRB Infrastructure Developers Limited and is registered under the SEBI (Infrastructure Investment Trusts) Regulations, 2014. It comprises of Six operational road projects having length of 2,421 km includes 5 BOT assets and 1 HAM asset with aggregate enterprise value of approx. Rs 7,827 crores. It has presence across six states in India with average residual concession period of ~14 years.
TheSponsoroftheTrusti.e.IRBInfrastructureDevelopers Ltd., is one of the largest infrastructure development and construction companies in India in terms of net worth in roads and highways sector. The Sponsor has been listed on the Stock Exchanges since 2008. As of March 31, 2025, the Sponsor has 26 projects, under various stages of development and operations.
Consequent to the formation transactions, on May 9, 2017, the Trust acquired an initial portfolio comprising the six Project special purpose vehicles (SPVs), all of which were wholly owned by the Sponsor and its subsidiaries. On September 28, 2017, the Trust further acquired its seventh project ‘Pathankot Amritsar on NH 15 in Punjab from the Sponsor and its subsidiary. Further, concession period for two of the project SPVs ended in the month of March and May 2022 and were successfully handed over to National Highways Authority of India (NHAI). In October 2022, the Trust acquired Vadodara Kim HAM project in the state of Gujarat from the Sponsor.
Distribution
As per the InvIT Regulations, not less than 90% of net distributable cash flows (NDCF) of each project SPV are required to be distributed to the Trust, in proportion to its holding in each of the project SPVs, subject to applicable provisions of the Companies Act, 2013. Further, the Trust is required to distribute at least 90% of NDCF to the unitholders.
Such distributions shall be declared and made not less than once in every six months in every financial year and shall be made within five working days from the record date. Since its listing, the Trust has been declaring distributions on a quarterly basis and has consistently adhered to the prescribed timelines under the InvIT Regulations.
For FY 2024-25, the NDCF of the Trust was Rs 464.40 crores, out of which the Trust has distributed 96.53%.
The Total pay-out from the NDCF for FY 2024-25 was Rs 8.00 per unit to the unitholders.
Statement of Net distributable cash flows (NDCFs) of IRB InvIT Fund
( Rs in Millions)
| Sr. No. | Particulars | For the year ended March 31, 2025 |
| 1 | Cashflows from operating activities of the Trust | (198.74) |
| 2 | (+) Cash Flows received from SPVs which represent distributions of NDCF computed as per relevant framework | 6,707.00 |
| 3 | (+) Treasury income / income from investing activities of the Trust (interest income received from FD, any investment entities as defined in Regulation 18(5), tax refund, any other income in the nature of 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) | 69.03 |
| 4 | (+) Proceeds from sale of infrastructure investments, infrastructure assets or shares of SPVs/ | - |
| Holdcos or Investment Entity adjusted for the following: | ||
| Applicable capital gains and other taxes | ||
| Related debts settled or due to be settled from sale proceeds | ||
| Directly attributable transaction costs | ||
| Proceeds reinvested or planned to be reinvested as per Regulation 18( 7) of InvIT | ||
| Regulations or any other relevant provisions of the InvIT Regulations |
( Rs in Millions)
*Any reserve funded by debt is not considered in the computation of NDCF.
Note :
1. The Trust has considered distribution of Rs 298.92 millions received from SPV after March 31, 2025 but before finalization and adoption of accounts of the IRB InvIT Fund.
2. As per the Master Circular SEBI/HO/DDHS-PoD-2/P/CIR/2024/44 dated 15 May 2024, details of NDCF distributable is as below –
| Particulars | ( Rs in Millions) |
| NDCF of Trust (A) | 4,810.98 |
| (+) NDCF of SPVs (B) | 6,922.88 |
| (-) Amount distributed by SPVs (C) | (6,707.00) |
| Amount Of NDCF Distributable D=(A+B-C) | 5,026.86 |
Trust has ensured that minimum 90% of the above amount will be distributed as NDCF.
3. In accordance with the SEBI circular no SEBI/HO/DDHS-PoD-2/P/CIR/2024/44 dated 15 May 2024, the framework for computation of Net Distributable cash flows ("NDCF") is revised at Trust level for the FY 2024-25. Accordingly,
NDCF for the period April 1, 2024 to March 31, 2025 has been calculated and presented in accordance with the new framework. NDCF for the periods for on or before 31 March 2024, has been calculated and presented as per the earlier framework and has been disclosed / reproduced as under:
Rs in Millions
| Sr. No. | Particulars | For the year ended March 31, 2024 | For the year ended March 31, 2023 |
| 1 | Cash flows received from Project SPVs in the form of Interest (Refer note 1) | 5,683.69 | 4,798.33 |
| 2 | Cash flows received from Project SPVs in the form of Dividend | 360.00 | - |
| 3 | Any other income accruing at the Trust level and not captured above, including but not limited to interest / return on surplus cash invested by the Trust | 73.54 | 79.56 |
| 4 | Cash flows received from the project SPVs towards the repayment of the debt issued to the Project SPVs by the Trust (Refer note 2 & 3) | 901.49 | 1,889.34 |
| 5 | Total cash inflow at the Trust level (A) | 7,018.72 | 6,767.23 |
| Less: | |||
| 6 | Any payment of fees, interest and expense incurred at the Trust level, including but not limited to the fees of the Investment Manager | (1,502.48) | (1,288.05) |
| 7 | Income tax (if applicable) at the Standalone Trust Level | - | - |
| 8 | Repayment of external debt | (552.11) | (542.50) |
| 9 | Total cash outflows / retention at the Trust level (B) | (2,054.59) | (1,830.55) |
| 10 | Net Distributable Cash Flows (C) = (A+B) | 4,964.13 | 4,936.68 |
Note :
1. Excludes interest due but not received of Rs 189.54 millions (Previous year Rs 353.91 millions) for the year ended March 31, 2024.
2. Netted off with long-term unsecured loan given to project SPVs.
3. The Trust has considered distribution of Rs 3.00 million received from SPV before finalization and adoption of accounts of the InvIT.
Factors affecting Operations
The business of Project SPVs prospects and results of operations and financial condition are affected by number of factors including the following key factors:
Terms of the Concession Agreements for tariff revision
Toll fees are pre-determined by the relevant government entities and cannot be modified to reflect the prevailing circumstances other than the annual adjustments to account for inflation as specified in the Concession Agreements.
For the current five BOT projects, the tariff revision structure and details of the last revision are as follows:
| Co. Name | Tari_ rate revision | Revision date | FY 2024-25 (%) |
| M.V.R. Infrastructure and Tollways Limited (MVR) | Linked to WPI | September 1, every year | 1% |
| IRB Jaipur Deoli Tollway Limited (IRBJD) (1) | 3% + 40% of WPI* | April 1, every year | 3% |
| IRB Tumkur Chitradurga Tollway Limited (IRBTC) (1) | 3% + 40% of WPI* | April 1, every year | 3% |
| IRB Talegaon Amravati Tollway Limited (IRBTA) (1) | 3% + 40% of WPI* | April 1, every year | 3% |
| IRB Pathankot Amritsar Toll Road Limited (IRBPA) (1) | 3% + 40% of WPI* | April 1, every year | 3% |
(1) Tari_ revision w.e.f. 3rd June, 2024 due to model code of conduct (Central Elections)
* WPI - Wholesale price index
Growth in Traffic Volumes
The Trusts indicative portfolio revenue of CAGR of 8-10% can be achieved with tariff revision of 3 3.5% combined with traffic growth of 5 - 6.5%. Going by historical performance, the intrinsic potential as well as current performance of the projects owned by the Trust, it is envisaged that the Trust likely achieve indicative portfolio revenue.
Operating and Maintenance cost
The Concession Agreement requires the Project SPVs to incure significant costs during the concession period including operating and maintenance expenses, such as periodic maintenance required to be performed. Periodic maintenance involves repair of wear and tear of roads, including overlaying the surface of the roads, if required.
The O&M of Project SPVs is managed by the IRB Infrastructure Developers Limited, (Sponsor and Project Manager), as per the fixed price agreements/contracts executed by respective Project SPVs for period upto March 31, 2030. The O&M cost covers routine and periodic maintenance: ( Rs in Millions)
| Project Name | FY 2024-25 | FY 2023-24 | FY 2022-23 |
| IRBJD | 124 | 107 | 103 |
| IRBTA | 127 | 121 | 369 |
| IRBTC | 468 | 34 | 30 |
| MVR | 225 | 223 | 47 |
| IRBPA | 538 | 202 | 182 |
| VK1* | 118 | 96 | 60 |
| IRBSD # | - | - | 41 |
* VK1 acquired in October 2022.
# IRBSD project ended on May 25, 2022 and the projects were handed over to NHAI
Regulatory Commitments
As per the Concession Agreements, some of the Project SPVs are required to pay revenue share/premium to the NHAI.
In case of Omalur – Salem project, revenue share is paid to the NHAI at a fixed rate per annum which is ~ 22.50% of gross toll revenues.
Interest Rates Scenario:
Interest rates impact both growth and inflation. Higher the interest rate, higher the cost of capital is. This reflects on the slowdown of investments in the economy. Interest rate is a significant factor affecting any new acquisition of asset. Banks and financial institutions provide the debt under floating or fixed rate depending on the asset class, Cash flow generation and the credit rating of the borrower.
In VK1 HAM project, our income from operation and maintenance is linked with the movements of inflation indices in a relevant period and income from interest on the balance completion cost is linked with RBI Bank Rate. Under the rising interest rate scenario, the higher interest on annuity due to higher RBI bank rate will mitigate the risk of higher interest rate on external debt.
General economic conditions in India - level of investment and activity in infrastructure development sector
The central and state governments have renewed their focus on infrastructure that is evident from the fact that the budgetary allocations for construction and augmentation of roads and highways in India have increased significantly. This increased budgetary allocation, when complemented by the private sector participation would generally result in large infrastructure projects in India.
Innovative bidding structures like HAM and TOT provide scopes for increase in portfolios of highway developers. This would provide huge scope for future acquisitions for the Trust and thereby enhance stakeholders value.
Financial Review
Financial Analysis – Financial year 2025 v/s Financial year 2024:
The total consolidated income for the year ended March 2025 has increased to Rs 11,102 million from Rs 10,859 million for the year ended March 2024.
EBITDA for the year ended March 2025 increased to Rs 9,162 million from Rs 8,860 million for the year ended March 2024.
Interest costs for the year ended March 2025 increased to Rs 2,943 million from Rs 2,722 million, in the previous year.
Depreciation, which includes amortization; for the year ended March 2025 stood at Rs 2,541 million compared to Rs 2,295 million in the year ended March 2024.
Profit after tax for the year ended March 2025 stood at
Rs 3,556 million compared to Rs 3,731 million for the year ended March 2024.
Financial Analysis – Financial year 2024 v/s Financial year 2023:
The total consolidated income for FY 2023-24 has increased to Rs 10,859 million from Rs 10,387 million in FY 2022-23 (Consolidated Income excludes revenue from arbitration income amounting to Rs 4,231 million during FY 2022-23).
The consolidated toll revenues for FY 2023-24 stood at Rs 9,152 million from Rs 9,032 million for 2022-23. The concession period for two BOT assets i.e. IDAA Infrastructure Limited i.e. Bharuch Surat and IRB Surat Dahisar Tollway Limited i.e. Surat Dahisar project ended on March 31, 2022 and May 25, 2022 respectively and the projects were handed over to NHAI.
EBITDA for FY 2023-24 stood at Rs 8,860 million from Rs 8,278 million in FY 2022-23.
Interest costs (including interest on premium deferment) for FY 2023-24 stood at Rs 2,722 million as against Rs 1,926 million for FY 2022-23 on account of addition of Vadodara Kim HAM project.
Depreciation (including amortization) for FY 2023-24 stood at Rs 2,295 million from Rs 2,613 million in FY 2022-23.
Profit before tax for the year ended March, 2024 increased to Rs 3,843 million from Rs 3,739 million in March, 2023.
Profit after tax for the year ended March, 2024 increased to Rs 3,731 million from Rs 3,696 million in March, 2023.
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 projected revenue for the balance toll period, to reflect the pattern in which the economic benefits of the assets 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 recognized 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.
Premium deferment
The balance sheet of the Trust reflects premium deferral (i.e. premium payable less paid after adjusting premium deferment) as aggregated 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. Further, during the construction 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 amortization
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).
Other expenses
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 Responsibilities and other miscellaneous expenses.
Human Resource
We view human resource development as a continuous and strategic process, reflected in our ongoing employee engagement initiatives and regular talent management reviews. Key highlights from the past year include:
Career Path Development: Creation and implementation of detailed career paths for high-potential employees to support their long-term growth within the organization.
Internal Talent Resourcing: Emphasis on filling vacancies through internal talent, promoting employee mobility and career progression.
Skip-Level Meetings: Organization-wide skip-level meetings were conducted to foster transparency and open communication between leadership and team members.
Manpower Optimization: A focused initiative was launched to optimize manpower costs, enhance productivity, and improve accountability. This has contributed to the development of a performance-oriented career model across the organization.
These efforts underline our commitment to nurturing talent, creating growth opportunities, and building a high-performance culture.
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. Having said that, the biggest risk that the projects face is the slowdown in traffic and diversion of traffic. To overcome such risk, we have enough safeguards in the concession agreement with NHAI wherein our losses would be either cash reimbursed, or we would be provided an extension of time in our concession period.
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. Investment Manager ensures that related party transactions should be in the best interest of the Unitholders and conforms 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), prior to 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 five 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 describe strategies, objectives, plans or goals are also forward-looking statements.
All forward-looking statements and projections are subject to risks, uncertainties and assumptions. Actual results may differ materially from those suggested by forward-looking statements or projections due to risks or uncertainties associated without expectations with respect to, but not limited to, regulatory changes pertaining to the infrastructure sector in India and the
Trusts ability to respond to them, the Trusts ability to successfully implement its strategy and objectives, the Trusts growth and expansion plans, technological changes, the Trusts exposure to market risks, general economic and political conditions in India that have an impact on the Trusts business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in the infrastructure sector. Certain important factors that could cause the
Trusts actual results to differ materially from expectations include, but are not limited to, the following: the business and investment strategy of the Trust; expiry or termination of the Project SPVs respective concession agreements; future earnings, cash flow and liquidity; potential growth opportunities; financing plans; the competitive position and the effects of competition on the Trusts investments; 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.
Therecanbenoassurancethattheexpectationsreflected 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 forward-looking statements and projections and not to regard such statements to be a guarantee or assurance of the Trusts future performance or returns to investors.
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