Capital Infra TrustQ3 FY25Construction

Capital Infra Trust

Q3 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 3

→Capital Infra Trust aims to significantly grow its Asset Under Management (AUM) to at least INR 10,000 crores by FY27.
→Growth driven by acquisitions of 17 Right of First Offer (ROFO) assets from sponsors and additional third-party HAM road projects.
→Focus primarily on adding HAM-based road assets, which provide stable annuity cash flows and have long concession periods (over 13 years).
→Pipeline includes acquisition of 3 operational ROFO assets imminently and expected addition of 4-5 ROFO assets by mid-FY27, with 2-3 more by end of FY27.
→Planned acquisitions to increase AUM by over 60% from INR 4,282 crores to about INR 6,800 crores by FY26.
→Industry outlook remains favorable with sustained government budget allocation and strong momentum in road sector, especially HAM projects.
→Strategy targets stable, inflation-linked cash flow yield of 10-12%, with value-accretive acquisitions improving Net Distributable Cash Flow (NDCF) and NAV.

Category 3

→Capital Infra Trust is entering a new growth phase driven by balance sheet deleveraging, value-accretive acquisitions, and disciplined capital allocation.
→Addition of three ROFO assets at a 9% discount is expected to be accretive, increasing AUM by over 60% from INR 4,282 crores to approximately INR 6,800 crores by FY26.
→The standalone IRR on these three assets is above 14%, higher than the current portfolio IRR.
→NDCF (Net Distributable Cash Flow) is expected to improve post-acquisition, although exact contribution will be clearer after acquisition and equity raise.
→The Trust targets sustainable cash yield distribution between 10% to 12%.
→Debt reduction plans and refinancing at competitive rates (around 7.1% to 7.2%) aim to lower financial costs, supporting profitability.
→Long-term goal: AUM of INR 10,000 crores by FY27 with a diversified, high-quality HAM asset portfolio expected to enhance stable earnings and consistent distributions.

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Yes

→Capital Infra Trust plans to raise around INR 2,400 crores for acquiring three ROFO assets.
→Debt portion targeted is approximately INR 1,150 crores.
→Equity portion targeted is around INR 1,250 crores, expected through QIP (Qualified Institutional Placement) or preferential allotment.
→Additional borrowings will focus on repo-linked term loans to reduce cost and create a natural hedge, moving away from fixed-cost NCDs.
→Current leverage target is between 45% to 47% in the short term; may increase to 55%-60% after six distributions.
→The Trust plans to refinance some NCDs maturing in March 2026 to lower borrowing costs (~7.1%-7.2%).
→No prepayment penalty expected on planned INR 420 crores debenture repayments by December 2025.

→Capital Infra Trust has a pipeline of 17 ROFO (Right of First Offer) assets from the sponsor.
→Currently acquiring 3 operational HAM assets with a combined enterprise value of INR 2,590 crores.
→An additional 14 ROFO assets expected to be ready for acquisition over the next 1 to 3 years.
→Around 4 to 5 ROFO assets anticipated to be ready for acquisition by June to July next year (FY26).
→An additional 2 to 3 assets expected towards the end of FY27.
→Targeting acquisition of 1 to 3 third-party assets in the next financial year.
→Overall, the pipeline aims to increase AUM from INR 4,282 crores to approximately INR 10,000 crores by FY27, including both sponsor and third-party assets.

Yes

→Capital Infra Trust is focused on portfolio expansion through value-accretive acquisitions, notably acquiring three operational ROFO (Right of First Offer) HAM assets: Jodhpur Ring Road (Rajasthan), Hasanpur-Bakhtiyarpur (Bihar), and Champa-Korba (Chhattisgarh).
→These acquisitions add 164 kms of highways and increase AUM by over 60% from INR 4,282 crores to approximately INR 6,800 crores by FY26.
→Further, about 4 to 5 additional ROFO assets are expected to be ready for acquisition by June-July FY27, with 2-3 more towards the end of FY27.
→The strategy also includes acquiring 1-3 third-party HAM assets in the next financial year.
→Total acquisition cost for the three assets is around INR 2,400 crores, funded through INR 1,250 crores equity (QIP or preferential allotment) and INR 1,150 crores debt.
→The focus remains on HAM assets; no immediate diversification into toll assets.
→No specific mention of other capex or strategic investments beyond these acquisitions.

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