Citius Transnet InvIT IPO

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Strengths

• ✓The trust claims to have a relatively large and diversified portfolio of road assets, comprising both toll and annuity-based projects across multiple states. These assets have a relatively long operational history, with some toll projects operating for more than 10 years. This provides visibility into traffic trends and asset performance over time.
• ✓The trust claims to benefit from a right of first offer (ROFO) arrangement for the acquisition of additional road assets from the EAAA platform. (EAAA TransInfra Managers Limited is the investment manager to the Trust.) This includes a pipeline of hybrid annuity model (HAM) projects across multiple states. Such arrangements may support future portfolio expansion, subject to the execution of these acquisitions.
• ✓The asset portfolio is positioned across different geographies and is connected to key economic and industrial corridors. A significant portion of toll revenue is derived from economically active states, indicating exposure to regions with higher traffic movement. The portfolio also handles a mix of passenger and commercial traffic, with freight vehicles contributing a larger share.
• ✓The trust claims to maintain a mix of toll and annuity assets, which diversifies its revenue sources. Toll assets contribute a majority of revenue, while annuity assets provide fixed payments from government authorities. The presence of counterparties such as the National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways of India (MoRTH) may reduce counterparty risk.
• ✓The trust claims to have in-house asset management capabilities supported by the project manager. Its teams are involved across the asset life cycle, including operations, maintenance, and monitoring. It also uses technology-enabled systems such as traffic monitoring and asset management tools to support operations.
• ✓The trust claims to have access to asset acquisition capabilities through the EAAA platform, which has experience in acquiring infrastructure assets through different routes, including bilateral deals and insolvency processes. This has enabled the platform to build a diversified portfolio across asset types and geographies.
• ✓The trust claims to be supported by an experienced management and investment team with capabilities in capital structuring and refinancing. It has also reported improvements in credit ratings and reductions in interest costs for certain project assets post-acquisition, indicating active financial management.

Risks

• !The trust has reported losses before tax of Rs 214.42 crore, Rs 415.53 crore, Rs 738.14 crore, and Rs 633.83 crore in the nine months ended December 31, 2025, and FY25, FY24, and FY23, respectively. It has also reported losses for the period of Rs 219.05 crore, Rs 417.75 crore, Rs 774.12 crore, and Rs 654.01 crore during the same periods. Any continuation of such losses in the future may adversely affect the trust’s business, financial condition, and cash flows.
• !A significant portion of the trust’s revenue is concentrated in a few Project SPVs. Three SPVs, namely AMTPL, SRTPL, and SBGTPL, collectively contributed Rs 984.64 crore (49.55%) of revenue from operations in FY25, Rs 908.97 crore (48.53%) in FY24, and Rs 822.68 crore (46.39%) in FY23. Any adverse developments affecting these SPVs, including lower traffic volumes, regulatory changes, or operational disruptions, could materially impact the trust’s revenue, cash flows, financial condition, and its ability to make distributions to unitholders.
• !A portion of the trust’s revenue is dependent on annuity income and related payments from government authorities. Certain Project SPVs operate on an annuity basis, where fixed bi-annual payments, along with interest on unpaid annuities and O&M payments, are received from authorities such as NHAI and MoRTH. Any delay, reduction, or non-receipt of such annuity income or compensation payments could adversely affect the trust’s cash flows, financial condition, and its ability to make distributions to unitholders.
• !The trust may be exposed to potential liabilities arising from penalties related to its proposed ROFO assets. Some of the hybrid annuity model (HAM) assets intended to be acquired may have outstanding penalty demands from authorities for past operational issues or non-compliances. Any inability to recover these amounts through indemnities or liabilities exceeding agreed caps could result in additional financial obligations and adversely affect the trust’s financial condition, cash flows, and results of operations.
• !The trust’s financial projections and valuations are dependent on assumptions regarding the concession periods of its Project SPVs. In certain cases, these concession periods may be subject to extension approvals or reductions based on factors such as traffic performance, and there is no assurance that such extensions will be granted. Any failure to secure expected extensions, or any reduction in concession periods—as seen in the case of Ahmedabad Maliya Tollway Private Limited (AMTPL), where the concession period was reduced by 2.2 years—could adversely impact the trust’s revenues, cash flows, asset valuations, and its ability to make distributions to unitholders.
• !The Project SPVs are subject to strict operational and maintenance obligations under their concession agreements, failure of which can lead to penalties, payment deductions, or even termination of agreements. In such cases, concessioning authorities may impose damages, reduce annuity payments, or undertake remedial actions at the SPVs’ cost, including recoveries from escrow accounts. Any inability to recover these losses, penalties, or damages from project managers or contractors could adversely affect the Trust’s results of operations, cash flows, and its ability to make distributions to unitholders.
• !The company’s cash flows from toll-based assets are subject to seasonal fluctuations and broader economic cycles, which directly impact traffic volumes. Traffic typically declines during monsoon seasons and increases during holidays, while adverse weather conditions may also delay maintenance activities and reduce operational efficiency. Any significant deviation between actual and expected traffic volumes due to seasonal patterns or economic slowdown could adversely affect the company’s cash flows, financial condition, and results of operations.
• !The company had contingent liabilities amounting to Rs 512.98 crore as of December 31, 2025, including Rs 121.52 crore related to income tax matters, Rs 256.61 crore to indirect tax matters, Rs 77.51 crore towards guarantees and securities, and Rs 57.33 crore under other matters. These primarily relate to ongoing tax disputes, guarantees issued, and regulatory claims, for which no provisions have been made in the financial statements. If a significant portion of these contingent liabilities materialises, it could adversely affect the company’s results of operations, financial condition, and cash flows.

About Citius Transnet InvIT

Note: As per regulations, application cancellation is not allowed for any category. CITIUS is a transport sector-focused infrastructure investment trust that acquires, manages, and invests in transport infrastructure assets, primarily road projects in India. It operates through a portfolio of toll and annuity-based road assets held via project special purpose vehicles (SPVs) and holding companies. It is responsible for managing these assets, including toll collection, annuity income, and maintenance through a project manager. Subject to completion of the formation transactions, its initial portfolio is proposed to comprise 10 toll and annuity road projects spanning 3,406.71 lane-kilometres across nine Indian states. The trust was registered with SEBI as an infrastructure investment trust (InvIT) on August 1, 2025, and operates through its sponsor group, with an investment manager overseeing investment activities and a project manager responsible for operations, maintenance, and compliance with concession agreements. Use of proceeds: This is a fresh issue of shares. Therefore, the net proceeds from the fresh issue will go to the company. They will be utilised for the following purposes: For partial or full acquisition (or as applicable, redemption) of securities of a) SRPL; and b) certain identified Project SPVs, namely TEL, JSEL, Dhola and Dibang — Rs 1,000 crore General corporate purposes