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IRB InvIT Fund gets SEBI’s approval to go for an IPO

Market regulator Securities and Exchange Board of India (SEBI) has given an approval to IRB InvIT Fund, an investment trust sponsored by IRB Infrastructure Developers Limited to raise Rs 4,300 crore through an initial public offering (IPO).

Infrastructure Investment Trusts (InvITs) are like mutual fund schemes which pool in money from individual investors for investing in infrastructure initiatives.

IRB InvIT Fund had filed its draft papers during September 2016 and got ‘observations’ from SEBI on February 9 this year, which is necessary for any entity to launch a public offer. According to draft papers, IRB InvIT’s IPO comprises fresh issue of units worth up to Rs 4,300 crore by the Trust and an offer for sale of units by IRB Infrastructure Developers and its subsidiaries -- Modern Road Makers Ltd., Aryan Toll Road Pvt Ltd., ATR Infrastructure Pvt Ltd. and Ideal Road Builders Pvt Ltd.

The Mumbai-based toll road developer is the sponsor of IRB InvIT Fund, the trust registered with SEBI, while IRB Infrastructure Pvt Ltd. is the investment manager to the trust. The investment manager in consultation with global coordinators and book running lead managers to the issue, reserves the option to retain over subscription of up to 25 per cent of the issue size in accordance with the InvIT norms.

Other such trusts registered with SEBI are GMR Infrastructure Investment Trust, MEP Infrastructure Investment Trust and IL&FS Transportation Investment Trust.

SEBI had in August 2014 introduced InvITs -- that would enable promoters to monetise completed assets -- to help infra developers mop up funds for long-term projects in a more transparent manner. The regulator plans to remove the restriction on the SPV to invest in other SPVs, thus allowing InvIT to invest in a holding company which subsequently holds stake in SPVs.

Reacting to this, IRB Infrastructure Developers' stock soared 4 per cent in Monday’s trade to touch day high of Rs. 239.

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