Shrem InvIT was incorporated as an irrevocable Trust under the provisions of Indian Trusts Act, 1882 on December 31, 2020 and registered as an Infrastructure Investment Trust under the Securities and Exchange Board of India (Infrastructure Investment Trust) Regulation, 2014 on February 04, 2021. The Fund is settled by the Sponsor, Shrem Infra Structure Private Limited (the Sponsor), an infrastructure development company in India. The Trustee to the Fund is Axis Trustee Services Limited. Whereas, the Investment manager for the Fund is Shrem Financial Private Limited.
The Fund has been formed to invest in infrastructure assets primarily being in the road sector in India. All of the Fund`s road projects are implemented and held through holding Companies and special purpose vehicles as listed. The trust portfolio of assets comprises 24 road project SPVs acquired by the sponsor through three companies namely, Shrem Roadways Private Limited (SRPL), Shrem Infraventure Private Limited (SIPL) and Shrem tollways Private Limited (STPL). These 3 companies were acquired by trust through sponsor on September 16, 2021.
The Shrem Group was founded in 2010 by Nitan Chhatwal, and has managed diverse investments in the hospitality, health care, real estate, and infrastructure sectors. The Sponsor has set up the Trust, which is acquiring 100% of the issued and paid-up equity share capital of Shrem Infraventure Private Limited, Shrem Roadways Private Limited, and Shrem Tollway Private Limited respectively.
It is proposed that through the Holding Companies, the Trust will ultimately acquire 24 Project SPVs, which maintain and operate road assets aggregating to approximately 6,442.35 lane kilometers, located across five states in India. Shrem InvIT got its units listed on National Stock Exchange (NSE) and commenced operation from the month of September 2021 by acquiring sizable portfolio of 24 road infra-assets. In addition to existing portfolio of 24 road projects, the InvIT is presently in the process of acquiring 10 road assets in sync with its sustainable growth strategy.
Shrem InvIT is an irrevocable trust set up under the Indian Trusts Act, 1882 and registered with the Securities and Exchange Board of India as an Infrastructure Investment Trust under the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. The Trust currently owns, operates, and maintains a portfolio of 24 road assets across five states in India i.e. Madhya Pradesh, Uttar Pradesh, Gujarat, Maharashtra and Karnataka. These roads are operated and maintained pursuant to terms & conditions of Concession Agreements entered by concessionaire SPVs and within the framework of SEBI InvIT Regulations, 2014. InvIT, being a new instrument, is at emerging stage in terms of market participation in infra business as well as is evolving in terms of regulatory aspects. The InvIT regime has inherent nature of dealing in large scale of operations and facilitates to boost infrastructure development in the country. The Trust is committed to contribute towards development and maintenance of the world class state-of-art road infrastructure in the country by acquisition of completed road infra-assets. The key parties involved in an InvIT are the Sponsor, Trustee, Investment Manager (who takes all the acquisition/ divestment related decisions) and Project Manager as well.
Shrem InvIT is set-up for the purposes of carrying on the activity as an Infrastructure Investment Trust and for making investments in the road infra-projects and securities of Indian companies that are carrying on businesses in infrastructure sector, in accordance with the InvIT Regulations. The InvIT has acquired 100% shareholding in 20 Project SPVs and 74% shareholding in 4 Project SPVs (on account of shareholding requirements under relevant concession agreements) through 3 Intermediary Holding Companies, which maintain and operate road assets. The InvIT as an investment platform offers attractive investment opportunities and is expected to take wings, given the huge government outlay for infrastructure projects. The government has identified InvIT as a way to attract large institutional long-term investors in infrastructure space, to allow for capital recycling and further investments under PPP mode.
InvIT plays a key role in the monetization of existing projects with conducive regulatory frameworks, cash flow profile, and taxation advantage. It helps developers to release their invested equity and deploy capital in new projects. This enables them to address the challenge of projects with high capex demands. Another advantage of InvIT is that proceeds raised from such vehicles are neither counted as debt nor as equity and provides regular return on capital infused, by way of distribution.