Reliance Infra to raise Rs5,000 cr via sale of stake in investment trust

Reliance Infrastructure has announced plans to raise Rs5,000 crore through its newly-formed Infrastructure Investment Trust (InvIT), which received approval from market regulator Sebi on Friday.

The Anil Ambani-led Reliance Infrastructure plans to sell at least 51-per cent stake in the trust to raise Rs5,000 crore, which will help fund R-Infra's ongoing infrastructure projects.

R-Infra had applied for registration of   an investment trust for its toll road projects to the Securities and Exchange Board of India (Sebi) sometime in September.

The Securities and Exchange Board of India (Sebi) on Friday approved the registration of the infrastructure investment trust (InvIT) of Reliance Infrastructure Ltd, the firm said in a filing to stock exchanges.

''Reliance Infrastructure Limited is the sponsor to the said InvIT fund, which will carry out the activities as an InvIT, subject to the conditions specified in the SEBI Act, 1992 and the Regulations made there under,'' the firm said in the exchange filing.

The equity infusion expected to take place in the fourth quarter of the current fiscal, will help the company avoid debt on these projects, which will reflect on the consolidated balance sheet, reports quoting sources at the company said.

Other major infrastructures developers such as IRB, GMR and IL&FS are also in the process of forming infrastructure investment trusts, which gives them an opportunity sell their stake in completed projects to the trust, which in turn can raise long-term and tax-free funds from unit holders.

Reliance Infrastructure's trust will own 10 road projects, and the company is  keen to add another road project if Sebi allows.

The company, through various special purpose vehicles, has executed and is currently operating eleven road projects with total length of around 1,000 kms on build, operate and transfer (BOT) basis, which will form the trust.

R-Infra, a developer and contractor of infrastructure projects, has recently diversified into the defence sector.

Reliance Infrastructure has a consolidated debt of Rs26,000 crore. With the repayment of Rs5,000 crore of debt from the InvIT the company's debt on these projects will get further reduced in the consolidated debt.

Reliance Infrastructure, which is divesting in non-core assets to raise funds to pare debt, is also working on monetisation of roads and Mumbai power business in progress. It recently completed 100-per cent sale of cement subsidiary to Birla Corp for Rs4,800 crore.