Roadstar Infra Investment Trust Management Discussions

Global Economic Overview

In CY 24, the global economy demonstrated remarkable resilience amid a challenging and uncertain macroeconomic environment. Despite ongoing geopolitical tensions, trade disruptions and the lingering effects of prolonged monetary tightening, global GDP grew by an estimated 3.3%¹. Emerging Markets and Developing Economies (EMDEs) were the primary drivers of this growth, expanding at approximately 4.3% on the back of strong domestic demand and continued foreign investment. In contrast, advanced economies faced greater headwinds, including weak industrial output and fiscal constraints, leading to a more subdued growth rate of 1.8%.

Inflationary pressures moderated significantly during the year. Global inflation declined to 5.7%, primarily due to stabilising food and energy prices and the easing of supply chain constraints. This disinflationary trend enabled several central banks, including the US Federal Reserve, to shift away from tight monetary policies. Global trade volumes recovered moderately, growing by an estimated 3.8% in CY 24. This rebound was led by strong export performances in key economies such as the

US, China and other East Asian nations. However, renewed tariff measures, particularly from the US, introduced fresh uncertainties around long term trade stability.

Outlook

The global economic outlook for CY 25 and beyond reflects a period of moderation, with global growth projected to fall from 3.3% in CY 24 to 2.8% in CY 25, before recovering slightly to 3.0% in CY 26. This slowdown is largely attributed to global trade uncertainties, the impact of tariffs and tightening monetary policies. Despite this deceleration, growth in Emerging Markets and Developing Economies (EMDEs) is expected to remain a key driver, with projected growth rates of 3.7% in CY 25 and 3.9% in CY 26, benefiting from infrastructure development, demographic advantages and digital transformation.

Global headline inflation is projected to decline gradually, easing to 4.3% in CY 25 and further to 3.6% in CY 26. Easing inflation, improved liquidity and enhanced fiscal flexibility are expected to create a more favourable investment environment, boost business confidence and drive recovery in consumer spending and capital formation.

Indias Economic Overview

In FY 2024-25, India sustained its position as one of the worlds fastest growing major economies registering achieved a stable growth rate of 6.5% despite global economic headwinds.². As the fifth largest economy in the world and the largest economy in South Asia, Indias growth was driven by robust domestic demand, strong consumer spending, ongoing public investment and healthy momentum in the construction, services and trade sectors. Private consumption remained a key pillar of growth, further supported by the Government of Indias spending. The Union Budgets capital expenditure of H11.11 lakh crore reaffirmed the governments commitment to developing infrastructure.

Inflationary pressures eased significantly over the year, with consumer inflation declining to a five-year low of 3.34% in March 2025, largely due to a drop in food prices. With inflation well within the Reserve Bank of Indias target range, the central bank adopted a more accommodative stance, reducing the repo rate to 6.00% to boost liquidity and stimulate investment and consumption.

Outlook

Indias economic outlook remains highly optimistic, driven by strong macroeconomic fundamentals, strategic government initiatives and active private sector participation. With GDP growth projected to stay steady at 6.5% in FY 26³, India is set to continue its trajectory as one of the fastest-growing major economies, outpacing regional and global counterparts.

Domestic demand will remain the key driver of this growth, supported by stable consumption patterns, robust infrastructure spending and a revival in private sector investments. Inflation is expected to remain within the range of 4.0% and 4.2%, providing room for further easing. This moderation could support credit growth and further boost discretionary spending. The easing of retail inflation will further support domestic demand, strengthening the growth momentum. India currently the fifth largest economy in the world, is expected to strengthen its position to become the third largest economy by 2027, driven by increasing consumption and favourable fiscal and monetary policies.

Industry Overview

Infrastructure Sector

The global highway infrastructure sector remains a fundamental driver of economic growth, trade facilitation, and regional integration across both developed and developing economies. Annual global infrastructure investments are projected to exceed USD 9 trillion by 2025, with emerging markets, particularly in the Asia-Pacific region, expected to contribute nearly 60% of this total.

A key global trend is the divergence in priorities between developed and emerging markets. Developed economies like the US, Europe, and Japan are now focusing on modernizing aging road networks, improving safety standards, integrating climate-resilient infrastructure, and preparing for the transition to electric vehicles (EVs) and autonomous transport systems. Many regions in Europe and North America have also begun rolling out smart highways, incorporating sensors, IoT-based systems, and automated traffic management tools.

In contrast, emerging markets across Southeast Asia, Africa, and Latin America remain focused on network expansion, improving rural-urban connectivity, and strengthening cross-border trade corridors to boost regional commerce.

Another defining shift globally is the growing reliance on alternative financing structures, particularly Public-Private Partnerships (PPPs) and Infrastructure Investment Trusts (InvITs), helping governments bridge funding gaps and unlock private sector participation. Additionally, the securitization of toll revenues has become an increasingly mainstream mechanism for recycling capital from operational highway assets to finance further expansion.

Together, these trends highlight the evolving priorities of the global highway sector as it adapts to both future mobility needs and the ongoing demand for physical connectivity.

Indias highway sector stands at the centre of its broader infrastructure-led economic strategy. Recognizing the strategic role of highways in supporting industrialization, trade, and logistics, the Government of India has consistently prioritized the sector across budgetary allocations, policy initiatives, and institutional frameworks.

The Union Budget 2025-26 reaffirmed this focus, allocating H2.7 lakh crore to the Ministry of Road Transport & Highways (MoRTH), including H1.68 lakh crore to NHAI. These allocations are part of Indias commitment under programs like the National Infrastructure Pipeline (NIP) and PM Gati Shakti National Master Plan, both of which emphasize integrated infrastructure development across multiple transport modes.

Indias Bharatmala Pari yojana, one of the largest highway development programs globally, targets the construction of 65,000 km of national highways over multiple phases, with Phase-I alone encompassing 34,800 km. Bharatmala corridors are specifically designed to unlock Indias manufacturing and logistics potential by

Government of Indias infrastructure spending in recent years: India federal government infrastructure spending

The federal government will spend a record 11.1 trillion rupees on infrastructure creation in 2024-25

Note: BE is budget estimates, rest all are actual/provisional figures in trillion rupees Source: Indian budget documents/Budget Speech Reuters Graphics

Infrastructure Investment Trusts

Infrastructure Investment Trusts (InvITs) are SEBI regulated investments introduced in 2014 to attract long-term capital for infrastructure development in India. InvITs serve as a financing platform, attracting both domestic and foreign investors to invest in revenue generating infrastructure assets such as highways, power transmission lines and renewable energy projects. By offering a reliable, regulated investment option, InvITs help bridge the infrastructure funding gap.

InvITs are listed on stock exchanges, enhancing liquidity, promoting transparency through regulated disclosures and offering stable returns due to the predictable nature of infrastructure revenues. They also democratise infrastructure ownership by pooling funds from a broad investor base, enabling developers to monetise completed assets and reinvest in new projects.

The sector is witnessing strong growth, particularly in the road segment. Assets Under Management (AUM) are projected to increase by nearly 68%, from H1.9 lakh crore in September 2024 to H3.2 lakh crore by March 2026. This surge is expected to be driven by portfolio linking production centres, logistics parks, ports, and consumption hubs.

According to CRISIL Research, Indias infrastructure capex, including highways, is projected to grow at 8-9% CAGR over the next five years (FY25-FY29). Within this, the highways sector remains the largest component, with both greenfield expressway projects and brownfield widening/upgradation projects forming the bulk of upcoming investments.

expansion, entry of new players and diversification across geographies and asset types. Supporting this momentum, SEBI has recently eased regulations for follow-on offerings by InvITs, making fundraising more flexible and aligning Indian practices with global standards. These regulatory reforms are poised to enhance investor confidence and further position InvITs as key to infrastructure financing in India⁴.

Road and Highways Network in India

RoadtransportisavitalcomponentofIndiasinfrastructure ecosystem, significantly shaping the countrys economic development. As a key enabler of connectivity, trade and mobility, Indias road network forms the backbone of the nations logistical and social framework. India has the second largest road network in the world, spanning approximately 63.45 lakh kilometres. This vast network includes national highways, expressways, state highways, major district roads, other district roads and village roads, supporting both freight and passenger transportation across diverse terrains.

The National Highways, forming the core of this system, have witnessed remarkable expansion, growing by nearly 60% from 91,287 km in 2014 to 1,46,195 km in 2024. The Government of India has actively launched several large-scale initiatives to modernise and upgrade this network. In FY 24, the Ministry of Road Transport and Highways (MoRTH) allocated a record of approximately H3.01 lakh crore for capital expenditure in this sector.

Looking ahead, Vision 2047 for the National Highways outlines a strategic roadmap to enhance accessibility, efficiency and regional balance. The vision aims to ensure that all citizens are within 100–150 km of a high-speed corridor, benchmark Indias highway density against global standards, promote balanced development in underserved regions, provide world class amenities for passengers and a lower logistics cost relative to GDP.

Indias Road Network⁵:

National Highways	1,46,145 km
State Highways	1,79,535 km
Other Roads	63,45,403 km
Total	66,71,083 km

Growth Drivers

Growing Infrastructure Demand

Indias rapid urbanisation, population growth and increasing economic activity are fuelling consistent demand for high quality road infrastructure. As both freight and passenger movement continue to grow, the need for an efficient and expansive road network becomes increasingly vital.

Asset Monetisation

Asset monetisation has emerged as a key strategy in Indias road infrastructure development. Through structured models like Infrastructure Investment Trusts (InvITs), the Government of India is unlocking the value of revenue generating assets by attracting private capital while retaining asset ownership.

Increasing Traffic and Toll Revenues

A steady rise in both passenger and freight traffic on national highways has led to higher toll collections. This surgenotonlyenhancesthefinancial viability of road projects but also boosts investors confidence. The resulting revenue supports further investment into road maintenance and capacity expansion.

Public-Private Partnerships (PPP)

PPP models play a pivotal role in accelerating road infrastructure development by leveraging private sector expertise and investment. Structures such as the Hybrid Annuity Model (HAM) and Build-Operate-Transfer (BOT) offer balanced risk sharing and assured returns, ensuring timely project execution and long-term sustainability.

Government Support

The Government of India has played a proactive role in accelerating infrastructure growth through strategic policies and targeted investments. These initiatives aim to strengthen connectivity between economic hubs, improve access to remote regions and promote job creation and regional development. These efforts help to stimulate job creation and ancillary industries, resulting in a multiplier effect on the economy.

NHAI Monetization

Asset monetization has become a critical tool for funding Indias expanding infrastructure program, particularly in the highways sector. The National Highways Authority of India (NHAI) has actively pursued monetization of completed and operational road assets to unlock their value and channel the proceeds into new development projects.

Till date, NHAI has raised nearly H1.4 lakh crore⁶ through two primary modes of monetization — Infrastructure Investment Trusts (InvITs) and securitization of toll receipts. Through four phases of InvIT launches, a total of 2,345 km of highways have been monetized, contributing H43,638 crore to funding resources. Beyond InvITs, securitization of toll receipts, especially for marquee projects like the Delhi-Mumbai Expressway (DME), has contributed H46,847 crore, providing further financial flexibility.

Recognizing the success of these efforts, NHAI has also published a future pipeline of approximately 1,472 km for monetization in FY 26. This transparent approach, with structured identification of assets, regular public disclosure, and adherence to standard processes, has been instrumental in building investor confidence and broadening participation. As Indias road monetization framework continues to evolve, NHAIs proactive engagement with investors, along with the introduction of diversified monetization instruments such as public InvITs, is expected to further strengthen the financing ecosystem for highways. Collectively, these efforts are not only unlocking asset value but also supporting the larger goal of building a world-class highway network across India.

Key Government Schemes & Programs Supporting NHAI Monetization

The Government of India has introduced several flagship schemes and strategic programs aimed at accelerating highway development, improving logistics efficiency, and supporting asset monetization by NHAI. These initiatives work together to create a structured ecosystem for financing, constructing, and monetizing national highway infrastructure.

1. Indias highway monetization strategy is driven by a set of key government programs that together form a cohesive framework for infrastructure growth, financing, and asset recycling. The Bharatmala Pariyojana (BMP), launched in 2017, serves as the foundation of Indias highway expansion, targeting the construction of around 65,000 km of highways, with Phase-I alone covering 34,800 km. The program is designed to enhance connectivity across key economic corridors, border areas, ports, and remote regions, with several completed stretches now becoming strong candidates for monetization through InvITs, backed by high traffic potential. Complementing this is the National Monetization Pipeline (NMP), introduced by NITI Aayog in 2021, which specifically targets unlocking H1.6 lakh crore⁷ in value from operational highway assets between FY 22 and FY 25. By FY 25, about 71% of this target has been achieved, demonstrating NHAIs success in creating a predictable and transparent monetization pipeline. Alongside these initiatives is the PM Gati Shakti National Master Plan, launched in 2021, which integrates highways with rail, air, and port infrastructure through coordinated planning supported by GIS technology. This helps ensure that national highways align with key logistics routes, further improving their attractiveness for investors. Supporting this is the National Infrastructure Pipeline (NIP), introduced in 2019, which provides a H111 lakh crore investment roadmap for infrastructure

projects, with roads accounting for nearly H20 lakh crore, forming the largest sectoral component. Finally, the Logistics Efficiency Enhancement Programme (LEEP) complements these initiatives by targeting reductions in logistics costs through the development of Multimodal Logistics Parks (MMLPs) and improvements in tolling and freight management systems. Together, these schemes create a robust and structured approach for Indias highway sector, ensuring a steady flow of monetizable assets while strengthening long-term investor confidence and supporting Indias broader economic ambitions.

2. The Build-Operate-Transfer (BOT) model encourages private sector participation in highway development with balanced risk-sharing. Under BOT, the private sector bears construction risk and recovers investments through toll collection. Completed stretchesdevelopedunderthismodelfrequentlyform part of the InvIT bundles for monetization by NHAI.

3. Annuity-BasedProjectshavebeendesignedtoensure assured returns to private developers through fixed annuity payments from the government, regardless of traffic volumes. These projects provide greater certainty of cash flows for concessionaires, thereby improving their bankability. Completed annuity-based highways, after stabilizing operationally, can be offered for monetization through InvITs or securitization, allowing developers to recycle capital for new projects.

Challenges

Slowing Pace of Construction

While the Government of India has made significant progress in expanding the road network, the pace of highway construction has recently moderated. National Highways construction pace is expected to slow down from 12,350 kilometres in FY 24 to 11,100-11,500 kilometres in FY 25. This is mainly owing to escalating execution challenges and increasing project complexities⁸.

Land Acquisition and Environmental Clearances

Acquiring land for road projects remains one of the most persistent challenges. The process is often marred by legal disputes, delays in compensation and resistance from local communities. Additionally, obtaining environmental and forest clearances further extend project timelines. These delays disrupt project execution, increase costs and deter investor confidence.

Financing Constraints

Access to adequate and affordable financing continues to be a major challenge. Infrastructure projects require substantial capital outlay and have long payback periods, which limit the interest of commercial lenders. While new financial instruments such as InvITs and infrastructure bonds have emerged, participation across the infrastructure financing ecosystem remains limited.

Rising Participation of Moderate Sponsors

The increasing participation of moderate sponsors reflects interest in the infrastructure sector. However, their limited financial strength and dependence on external funding, coupled with a reduced risk appetite, can lead to delays in project execution and affect long term asset performance. Additionally, limited experience in managing complex infrastructure assets may impact operational efficiency.

Traffic Trends & Toll Revenue

Indias national highways have witnessed a steady rise in traffic volumes over the past several years, driven by both freight and passenger movements. The sector has rebounded strongly post-pandemic, with traffic growth underpinned by a combination of factors including rising consumption demand, increased industrial activity, and ongoing expansion of manufacturing hubs and logistics corridors.

As outlined in industry assessments, national highway traffic is expected to continue growing at a CAGR of around 6-7% over the next five years. This growth is being supported by structural trends such as the development of multimodal logistics parks (MMLPs), growing e-commerce penetration, and steady increases in inter-state goods movement. Additionally, policy support through initiatives like PM Gati Shakti and the governments logistics efficiency initiatives are expected to ease bottlenecks, further boosting road freight volumes.

In line with these traffic trends, toll revenues have demonstrated stable growth, with many national highways stretches generating toll revenues upwards of H0.8 crore per kilometer per annum, which serves as the benchmark threshold for monetization eligibility. Highway assets forming part of monetization bundles have consistently shown stable or growing cash flow trends, strengthening their attractiveness for private sector investors.

Looking ahead, the growth outlook for toll revenues remains positive. The planned operationalization of several expressway corridors, coupled with enhanced connectivity to upcoming industrial nodes and port infrastructure, is expected to drive sustained growth in toll collections. Furthermore, technological advancements in toll collection, led by FASTag penetration, are improving revenue efficiency while minimizing leakages.

Collectively, these developments are expected to contribute to a stable and predictable toll revenue stream, ensuring that monetized assets continue to perform as reliable investment vehicles for both public and private sector stakeholders.

Company Overview

Roadstar Infra Investment Trust ("Roadstar Trust") is an irrevocable trust established under the Indian Trusts Act, 1882 and registered with Securities and Exchange Board of India (SEBI) as an Infrastructure Investment Trust (InvIT) under the SEBI InvIT Regulations, 2014. It was created as part of a strategic financial restructuring initiative driven by a new board appointed by the Union of India to address the IL&FS Groups debt. Developed under a Resolution Framework approved by the National Company Law Appellate Tribunal (NCLAT), the initiative was designed to resolve outstanding debt while balancing the interests of multiple stakeholders and maximising value in a transparent and orderly manner.

More than a debt resolution mechanism, Roadstar Trust serves as a value enhancing platform enabling creditors to recover their exposure to IL&FS Group entities. The transfer of ownership in the underlying Special Purpose Vehicles (SPVs) to a broad base of institutional investors including banks, NBFCs, mutual funds, provident funds and insurance companies, enhances the long-term sustainability and operational resilience of the assets.

Currently, Roadstar Trust manages a diversified network of approximately 685 Km length (3070 lane kilometers) across six Indian states. The portfolio comprises six revenue generating road assets, including four toll-based projects and two annuity-based projects. Through this structure, Roadstar Trust offers a stable, regulated and investor aligned model for infrastructure asset management and value recovery.

Financial Performance

Financial Review

Particulars	FY 2024 - 2025	FY 2023 - 2024	% Change
Revenue from Operations	9,303.95	6,884.79	35%
Other Income	808.76	513.66	57%
Total Income	10,112.71	7,398.45	37%
EBITDA	6,412.20	5,404.75	19%
EBITDA Margin (%)	63%	73%	-13%
Cash EBITDA	8,546.22	6,611.17	29%
Profit Before Tax	-127.08	-213.83	-41%
Profit After Tax	-111.17	-193.83	-43%
Profit After Tax Margin (%)	-1%	-3%	-58%
Earnings per unit (H)	-0.08	-0.14	-42%
Cash Flow from Operations	7,565.18	6,253.25	21%
Return on Net Worth (%)	0%	-1%	-53%

Financial Ratios

Particulars	FY 2025	FY 2024	% Change
Debtors Turnover (in times)	0.01	0.01	-23%
Inventory Turnover (in times)	NA	NA	NA
Interest Coverage Ratio (in times)	2.1	2.0	-16%
Current Ratio (in times)	3.08	3.65	-16%
Debt Equity Ratio (in times)	0.96	0.76	27%

Our financial performance for FY 2025 shows revenue from operations of H 9,303.95 million compared to H 6,884.79 millions in FY 2024, representing a 35% increase, primarily on account of acquisition of BAEL during the year. Other income contributed H 808.76 million versus H 513.66 million in the previous year, marking a 57% growth. Total income reached H 10,112.70 million against H 7,398.43 million in FY 2024, reflecting a 37% year-over-year expansion.

EBITDA was H 6,412.20 million compared to H 5,404.75 million, showing a 19% increase, while EBITDA margin decreased to 63% from 73% in the previous fiscal year, indicating a 13% margin compression. This decrease is primarily attributable to the relatively lower construction margins recognized in BAEL, which was acquired during the year.

Profitability metrics showed mixed results with loss before tax declining 41% to H 127.08 million from H 213.83 million in FY 2024. Loss after tax recorded at H 111.17 million in FY 2025 compared to a loss of H 193.83 million in FY 2024, representing a 43% improvement in loss reduction.

Profit after tax margin remained negative at -1% versus -3% in the previous year, showing a 58% improvement. Cash flow from operations was H 7,565.18 million against H 6,253.25 million, marking a 21% increase, while return on net worth remained at 0% compared to -1% in FY 2024, showing a 53% improvement.

Financial ratios demonstrated varying performance across different metrics. Debtors turnover remained consistent at 0.01 times in both years with a 23% change indicator. Interest coverage ratio improved slightly to 2.1 from 2.0, representing a 16% enhancement. Current ratio decreased to 3.08 from 3.65, showing a 16% decline in liquidity position.

Debt equity ratio increased to 0.96 from 0.76, indicating a 27% rise in leverage during the fiscal year.

Human Resource

At Roadstar Trust, employees are regarded as the Companys most valuable asset and the driving force behind its operational excellence and long-term success. The Company is deeply committed to fostering a supportive, inclusive and future ready workplace that enables individuals to thrive, contribute meaningfully and grow alongside the organisation. With a strong focus on employee engagement, talent development and diversity and inclusion, Roadstar Trust promotes a culture of continuous learning and collaboration. Through structured upskilling initiatives and professional training, the Company aims to build an agile and adaptive workforce equipped to meet evolving industry demands.

Employee safety and well-being remain top priorities. The Company adheres to rigorous safety protocols and conducts regular training to ensure a secure and healthy working environment. Progressive HR policies further reinforce a work culture grounded in respect, compliance and equal opportunity, aligned with a strong commitment to practising human rights and ethical conduct.

AsRoadstarTrustcontinuestoevolve,itremainsdedicated to empowering its people laying the foundation for sustainable growth and shared success. As of March 31, 2025, the Company has a working force of 38 individuals.

Technology (FASTag, GNSS)

Technology has played a pivotal role in modernizing Indias highway network, particularly in the realm of toll collection and traffic management. The introduction and subsequent expansion of the FASTag system have marked a major shift toward digital tolling, significantly improving efficiency at toll plazas. FASTag adoption⁹ has now reached near-universal levels across the national highway network, facilitating quicker vehicle movement, reducing congestion, and improving fuel efficiency for highway users.

In parallel, efforts have been made to enhance operational transparency and reduce revenue leakage. Automated toll systems, integration with national vehicle databases, and improved enforcement mechanisms have strengthened overall toll collection efficiency. These initiatives also support the monetization framework by providing investors with greater confidence in the predictability of cash flows associated with operational highway assets.

While the adoption of GNSS (Global Navigation Satellite System)-based tolling is still in the early stages in India, discussions around its phased rollout continue under the policy framework of the Ministry of Road Transport and Highways (MoRTH). GNSS tolling, once implemented, will further modernize toll collection by enabling distance-based charges, particularly for commercial vehicles, and is expected to enhance efficiency for long-haul freight corridors.

The continued integration of technology into Indias highway management systems not only improves operational effectiveness but also strengthens the asset base for long-term monetization, supporting predictable cash flows and robust investor participation.

Internal Control System and their Adequacy

The Company has implemented a robust and structured internal control system, tailored to its size, complexity and operational needs. The internal controls are designed to ensure operational efficiency, safeguard assets and maintain the accuracy and reliability of financial reporting. This system covers both financial and operational controls, aimed at reducing risks, optimising business processes and ensuring that all operations adhere to the applicable legal and regulatory frameworks.

The effectiveness of the internal control system is regularly evaluated through routine audits carried out by the internal audit team. These audits assess the adequacy and effectiveness of controls across the Company, ensuring that the Companys operations remain in compliance with legal and regulatory standards. Audit findings are reported to the Audit Committee, which reviews the results and provides recommendations for any necessary corrective actions. The findings from audits, along with follow-up actions, are presented regularly to the Board of Directors for their review and approval. By regularly assessing and updating its internal controls, the Company strives to maintain a high level of operational efficiency, safeguard its assets and mitigate potential risks, all of which contribute to its long-term business sustainability.

Cautionary Statement

Certain statements in the Management Discussion and Analysis section, including those related to the Companys objectives, projections, estimates, expectations and outlook, may constitute forward looking statements under applicable laws and regulations. These statements are based on current assumptions, available information and forecasts at the time of reporting. However, actual results may differ materially from those expressed or implied due to various risks, uncertainties and factors beyond the Companys control, including but not limited to changes in macroeconomic conditions, regulatory developments, political or economic environments, competition and unforeseen events.

The Company does not guarantee or assure future performance and readers are advised not to place undue reliance on these forward-looking statements. The assumptions underlying these statements are subject to change, and as such, the estimates upon which they are based may also be revised. The Company assumes no obligation to update or revise any forward- looking statements in light of new information, future events, or developments, except as required by applicable law.