Detailed Rationale

Crisil Ratings has reaffirmed its rating on the long term bank facilities of Indus Infra Trust (IIT) (Formerly known as Bharat Highways InvIT (BHI)) at ‘Crisil AAA/Stable’.

 

IIT is an infrastructure investment trust (InvIT) for road sector assets sponsored by Aadharshila Infratech Pvt Ltd (AIPL). The Investment Manager, Project Manager and Trustee to the InvIT are GR Highways Investment Manager Pvt Ltd (GHIMPL), Aadharshila Infratech Pvt Ltd (AIPL) and IDBI Trusteeship Services Limited (ITSL) respectively.

 

The rating is continued to be driven by the stable performance of the trust for fiscal 2025. During fiscal 2025, the trust received fifteen annuities from its portfolio of existing assets with an average delay of seven days, which is within the grace period of fifteen days from the annuity due date as per the concession agreement entered into by respective SPVs. The trust has completed the acquisition of two assets from GR Infraprojects Ltd (GRIL, rated Crisil AA/Stable/A1+) namely GR Aligarh Kanpur Highway Ltd in Q2-FY25 and GR Galgalia Bahadurganj Highway Pvt Ltd in Q4-FY25. Post acquisition of these two assets, the trust has a portfolio of nine assets under hybrid annuity mode (HAM) concession with National Highways Authority of India (NHAI, rated Crisil AAA/Stable) minimizing the counter party risk. The average balance concession life of the assets is 11.13 years as on June 30, 2025. The trust’s portfolio of nine assets has received 63 annuities till June 30, 2025. All the annuities have been received timely without any major delay and no deductions. However, the future receipt of annuities timely from the authority for all the projects remains a key monitorable.

 

The trust has an enterprise value of 7,036.20 crore, as per the external valuation report dated May 07, 2025 and the trust’s consolidated debt stands at Rs 2144.266 crore as on March 31, 2025. This translates into a debt to EV of 30.48% in line with the expectations.

 

The trust has plans to add AUM of Rs 3,000-3,500 crore for fiscal 2026 driven by right of first offer (ROFO) assets under consideration from GRIL. Of which, one ROFO asset is expected to be acquired by trust by the end of Q2 of fiscal 2026. The trust intends to acquire these ROFO assets in combination of debt and partly through internal accruals. Further, the leverage is expected to increase to ~49% post-acquisition of other ROFO assets from GRIL by end of fiscal 2026. Adequacy of gearing for acquisition of assets with healthy debt protection metrics to be maintained by trust remains a key monitorable. 

 

The trust has a strong and diversified portfolio of HAM assets. The geographically diversified portfolio and strategically located stretches strengthen the credit risk profile of IIT. The rating also reflects the fixed price operations and maintenance (O&M) contracts entered between AIPL (project manager) and respective SPVs and back-to-back O&M sub-contracts between AIPL and GRIL (the O&M contractor). The rating also derives strength from the experience of GRIL in managing and maintaining road assets.

 

The company has adequate leverage and strong debt protection metrics currently. As per the regulations, the debt is capped at 49% of the trust valuation till the first six distributions, and can be subsequently increased to 70%, subject to compliance with InvIT regulations. However, with higher issuance of equity, the reliance on debt has been lower with the external debt being Rs 2144.26 crore in line with the expectations for fiscal 2025. Hence, the portfolio enjoys comfortable leverage with debt/enterprise value (EV) of around 30%. The trust is expected to complete six distributions with distribution for quarter ended June 2025, post which trust will be allowed to move leverage up to 70%. However, the debt philosophy of the management is to maintain a buffer of 10% margin and cap the debt at ~63%. The average debt service coverage ratio (DSCR) remains strong at above 1.10 times for the entire tenure of the existing debt. Additionally, as per the term loan agreement, Debt Service Reserve Account (DSRA) equivalent to one quarter of debt obligation has been created, thereby providing liquidity cushion. These strengths are partially offset by susceptibility to volatility in interest rates.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of Indus Infra Trust with its underlying special-purpose vehicles (SPVs). This is because the trust has / will have direct control over the SPVs and has infused / will infuse funds in them (in the form of loans [InvIT loan]) to repay debt. Furthermore, the SPVs will distribute their entire surplus cash flow to the InvIT in the form of interest and repayment (on InvIT loan) and dividend, leading to highly fungible cash flow. Also, as per the financing terms, the cap on borrowings has been defined at a consolidated level - aggregate consolidated borrowing for the InvIT and its SPVs is restricted at 49% of the valuation till the first six distributions, which can be subsequently increased to 70% subject to compliance with InvIT regulations.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

• Healthy operational track record of assets with strong counterparty: The portfolio comprises of 9 operational HAM assets. These assets have an operational track record of 1.5 - 4.5 years and are located across 6 states thereby providing geographical diversification. Additionally, no HAM asset contributes more than 25% to the total annuity of the InvIT, and the balance concession period for the 9 assets (9.66-13.78 years) will provide long-term cash inflow to the InvIT.

 

The counterparty for all the assets is NHAI and the outlook on it reflects the outlook on the sovereign, which reduces counterparty risk. Additionally, due to the inherent benefits of HAM projects, the traffic risk has been assumed by NHAI, which provides stability and predictability to cash flow.

 

GR Phagwara Expressway Ltd (GPEL) and Porbandar Dwarka Expressway Pvt Ltd (PDEPL) has a track record of ten annuities till date, while GR Akkalkot Solapur Highway Pvt Ltd (GASHPL) and GR Sangli Solapur Highway Pvt Ltd (GSSHPL) have received eight annuities each. Further, Varanasi Sangam Expressway Pvt Ltd (VSEPL) has received nine annuities, and GR Gundugolanu Devarapalli Highway Pvt Ltd (GDHPL) has received seven annuities. GR Dwarka Devariya Highway Pvt Ltd (GDDHPL) has received five annuities, GR Aligarh Kanpur Highway Pvt Ltd (GAKHPL) has received four annuities and GR Galgalia Bahadurganj Highway Pvt Ltd (GGBHPL) has received two annuities till June 30, 2025. The annuity payments for nine HAM assets have been received without any substantial delay or material deduction.

 

• Strong debt protection metrics: The financial risk profile is expected to be healthy, supported by a comfortable average DSCR of above 1.10 times for the entire tenure of the existing debt. This is on account of fixed annuity payments and moderate debt of Rs 2113.75 crore for the trust as on June 30, 2025. The lower dependence on debt currently has kept the gearing low with cushion available for further acquisitions and the debt servicing is expected to be further supported by cash flow pooling of all projects under the InvIT structure. Due to the fixed nature of the annuities and a strong counterparty (NHAI), all cash inflows, that is, the annuity payment from NHAI, interest on remaining annuity and inflation-adjusted O&M payment from NHAI are expected in a timely manner, which will support debt repayment.

 

As per the InvIT guidelines, debt must not exceed 49% of the asset value (until six consecutive dividend distributions) which is also built in the financing documents. The portfolio enjoys comfortable leverage with debt / enterprise value (EV) of around 30%. Further, the trust will complete its 6 distributions by quarter ended June 2025. Post which, the trust will be allowed to take Debt/EV up to 70% maintaining AAA rating and other regulatory approvals. Additionally, as per the term loan agreement, the trust has maintained a 3-month DSRA of Rs 105.09 crore in the form of fixed deposits (FDs) with bank as on June 30, 2025.

 

IIT envisages acquisition of more assets over the medium term while maintaining the terms regulated by InvIT regulation (debt/EV to be lower than 49%), thereby maintaining healthy debt protection metrics. More-than-expected increase in debt impacting the financial risk profile will remain a key rating sensitivity factor.

 

• Experienced management team: IIT is backed by the experienced management team of AIPL and GRHIMPL, who have a strong management team with extensive experience, in-depth understanding and a proven track record of performance in the road and highways sector. The management team has an average of more than 33 years of experience in various sectors including in the road and highways sector and brings expertise in the areas of business strategy, operational and financial capabilities. In addition, IIT assets are managed by qualified personnel of the Project Manager.

 

• Fixed-price, long-term O&M agreement : O&M payments have come from NHAI without any major deductions for all the 9 operational SPVs so far. Furthermore, O&M expenses are inflation-adjusted with 70% weight to WPI and 30% weight to CPI, reducing the variability in O&M payments. The acquired HAM asset has executed fixed-price O&M Contracts between respective SPVs and AIPL and back-to-back O&M sub-contracts between AIPL and GRIL, the O&M contractor for the entire concession period. These fixed-price contracts provide the cushion in terms of stability of cash outflow. Any increase in O&M higher than stipulated in the agreement will be borne by GRIL, resulting in lower volatility in cash flow for IIT.

 

Weakness:

• Susceptibility to volatility in interest rates: Any reduction in the bank rate can impact the DSCR given that a large proportion of the cash inflow is from the interest on balance annuities. Furthermore, as operation costs depend on inflation and the sanctioned rupee term debt has a floating interest rate, any significant increase in these components could impact cash flow. However, coverage indicators will be safeguarded to some degree by the natural hedge as the movement in interest rate on borrowings that are linked to external benchmark and the interest on annuities that are linked to the bank rate shall move in the same direction.

Liquidity: Superior

Annuity receipts by the SPVs which will be subsequently up streamed to the IIT in the form of interest payments, principal repayments and dividends will be adequate to meet operational expenses and debt obligation. DSCR remains strong above 1.10 times for the entire tenure of the existing debt. Additionally, as per the term loan agreement the trust has maintained three months DSRA of Rs 105.09 crore in the form of fixed deposits (FDs) with banks as on June 30, 2025.

Outlook: Stable

Crisil Ratings believes IIT will continue to benefit from the steady and timely receipt of annuities by the SPVs backed by a strong counterparty.

Rating sensitivity factors

Downward factors:

• Substantial delay and/or deduction in annuities and O&M payments in the SPVs impacting liquidity
• Higher-than-expected incremental borrowings and /or debt-funded acquisition of weak assets with low revenue potential impacting the overall DSCR
• Non-maintenance of adequate liquidity reserve in the form of 3-month DSRA
• Non-adherence to the covenants of the sanctioned debt

About the InvIT

IIT is an infrastructure investment trust of roads sector assets sponsored by AIPL with GHIMPL as its investment manager, AIPL as the project manager and ITSL as the trustee.

 

The InvIT was registered with SEBI in 2022 and has acquired 100% of the shareholding of the sponsor in 7 project SPVs: GPEL, PDEPL, GDHPL, GASHPL, VSEPL, GSSHPL, GDDHPL, GAKHPL and GGBHPL. IIT was listed on the BSE and NSE on March 12, 2024. Post acquisition of the equity shares of the project SPVs, the InvIT has issued fully subscribed ordinary units of 44,29,38,605 at Rs 100 per unit. Further, the trust completed acquisition of two more assets from GRIL being GAKHPL and GGBHPL. Post acquisition of these two assets, the trust has a portfolio of 9 assets under hybrid annuity mode (HAM) concession

 

GPEL was incorporated in 2016 for four laning of the Phagwara to Rupnagar section of NH-344A from Km 0.00 (Design Chainage) to Km. 80.820 (Design Chainage) in Punjab on HAM basis. The project received PCOD on February 25, 2020, and COD on May 26, 2021, and had received 10 annuities till June 30, 2025

 

PDEPL was incorporated in 2017 for four-laning of the Porbandar-Dwarka section of National Highway 8E in Gujarat from 356.786 km to 473.000 km (a stretch of 116.214 km) on a design, build, finance, operate, and transfer basis under HAM. The project received PCOD on April 18, 2020, and COD on October 13, 2021, and has received 10 annuities till June 30, 2025.

 

VSEPL was incorporated in 2017 for six-laning of the Handia to Varanasi section of NH-2 from km 713.146 to km 785.544 in Uttar Pradesh under NHDP phase–V. The project received PCOD on November 2, 2020 and COD on January 19, 2022, and had received 8 annuities till June 30, 2025.

 

GASHPL was incorporated in 2018 for four-laning of the Akkalkot-Solapur section of NH 150E with paved shoulders from design chainage km. 99.400 to km 138.352 / existing chainage from km. 102.819 to km. 141.800 (design length 38.952 km.) including Akkalkot bypass (design length 7.350 km.). The project received PCOD on March 31, 2021, and COD on March 09, 2023, and had received 8 annuities till June 30, 2025.

 

GSSHPL was incorporated in 2018 for four-laning of the Sangli-Solapur (Package- III: Watambare to Mangalwedha) Section of NH-166 from existing Ch. Km 272.394 to Ch. km 314.969 (Design Ch. km. 276.000 to Ch. km. 321.600). The project received PCOD on June 28, 2021, and COD on March 01, 2023, and had received 8 annuities till June 30, 2025.

 

GDHPL was incorporated in 2018 for four-laning of the Gundugolanu-Devarapalli-Kovvuru section of NH-16 from km 15.320 (existing km 15.700) to km 85.204 (existing km 81.400) in Andhra Pradesh under Bharatmala Pariyojana. The project received PCOD on July 10, 2021, and COD on September 30, 2022, and had received 7 annuities till June 30, 2025

 

GDDHPL was incorporated in 2019 for four-laning of the Dwarka (Kuranga)-Khambhaliya-Devariya section of NH 151A in Gujarat under Bharatmala Project. The project received PCOD on August 2, 2022, and had received 5 annuities till June 30, 2025.

 

GAKHPL was incorporated in 2021 for four-laning of the Aligarh-Kanpur section from Naviganj to Mitrasen of NH-91 in the state of Uttar Pradesh under Bharatmala Project. The project received PCOD on February 24, 2023, and COD on August 09, 2024, and received 4 annuities till June 30, 2025.

 

GGBHPL was incorporated in 2022 for four-laning of the Galgalia to Bhadurganj section of NH-372 on hybrid annuity mode in the state of Bihar under Bharatmala Project. The project received PCOD on April 06, 2024, and had received 2 annuities till June 30, 2025.

Key Financial Indicators

As on / for the period ended March 31		2025	2024
Operating income	Rs crore	744.60	128.61
Profit after tax (PAT)	Rs crore	481.67	15.17
PAT margin	%	64.69	11.79
Adjusted debt/adjusted networth	Times	0.44	0.23
Adjusted interest coverage	Times	4.87	1.81

 Note: Financials of fiscal 2024 are not meaningful (NM) as the assets were acquired in the month of March 2024.

Any other information: Not applicable