Roads InvIT: Shrem Group to raise Rs 600 cr through IPO
Mumbai-based infrastructure development company Shrem Group is planning to raise Rs 600 crore through an initial public offering (IPO) of its Shrem Infrastructure Investment Trust (Shrem InvIT), which will open for subscription this month.
This will be the first InvIT offering with hybrid annuity model (HAM) road projects. Government annuity payments will comprise 85% of the InvIT’s revenues, and the remaining 15% will come from toll collection.
The IPO will be a fresh issue of six crore units of Rs 100 each, and the firm will use the proceeds to pare the debt. The InvIT floated by Shrem Group has an enterprise value of about Rs 7,000 crore. Post the floatation, Shrem will retain about 86% stake in the InvIT.
Shrem had acquired a portfolio of 24 projects from Dilip Buildcon Ltd in 2017 and 2018. These 24 road projects totalling 6,442.35 km are spread across Maharashtra, Madhya Pradesh, Gujarat, Uttar Pradesh, and Karnataka.
Additionally, the Shrem Group is also in the process of raising around Rs 3,400 crore of debt from the State Bank of India to refinance the debt of the road portfolio. The company aims to double its assets under management in three to five years.