Oriental Infra Trust के निदेशक की रिपोर्ट

Mar 31, 2025

The Sponsors established the Trust on June 15, 2018, as an irrevocable trust under the provisions of the Indian Trusts Act, 1882. The Trust was registered as an Infrastructure Investment Trust under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 ("SEBI InvIT Regulations") on March 26, 2019, with registration number IN/InvIT/18-19/0011. The Sponsors settled the Trust with an initial contribution of ^5,000 each, which shall remain non-distributable.

The Investment objectives of the Trust are:

a.    To carry on the activity of a Trust as permissible under the SEBI InvIT Regulations, to raise resources directly, through the Trust or indirectly through the Project Entities, and in accordance with the SEBI InvIT Regulations and to make investments in accordance with the directions of the Investment Manager;

b.    To acquire, hold, manage, invest in, transfer or sell the Project SPVs which undertake projects only in the respect of roads and highways Projects;

c.    To raise funds in accordance with the InvIT Documents and applicable law (as defined in the Trust Deed) for the purpose of attaining the object and purpose of the Trust;

d.    To make investments and distributions in accordance with the InvIT Documents and applicable law (as defined in the Trust Deed);

e.    To do all other things necessary and conducive to the attainment of the investment objectives of the Trust, as set out above, directly or through agents or other delegates (including the Investment Manager) in accordance with the provisions of applicable law (as defined in the Trust Deed) and the InvIT Documents; and

f.    To not carry on any principal Business or Trade, other than those permitted under the InvIT Documents.

The Trust's activities comprise owning and investing in infrastructure Project SPVs to generate cash flow for distribution to unit-holders in India. The Trust currently holds a portfolio of six road assets, comprising five toll-road assets and one annuity road asset, located in the states of Maharashtra, Madhya Pradesh, Uttar Pradesh and Karnataka. These roads are operated and maintained under concessions granted by the NHAI and are owned and operated by the Project SPVs. These assets are strategically located and contribute to stable cash flows through toll and annuity-based revenue models.

On June 24, 2019, the Trust acquired 100% of the issued equity shares of five Project SPVs from the Sponsors, thereby obtaining beneficial management control of these entities. The Trust is listed on the National Stock Exchange of India Limited ("NSE"), enhancing its visibility and governance standards. The Trust acquired a toll project from its Sponsors in October, 2022, marking its first project acquisition since the listing of its units. For more details on the assets of the Trust, please refer the section titled "Brief details of all the assets of the Trust".

Activities of the InvIT during the year

During the year, the total income and gains of the Trust stood at INR 10,693.01 million on a standalone basis. The Trust distributed Rs. 13.48 per unit to the Unitholders. The Trust did not undertake any refinancing during the year, as the prevailing interest rates on its Rupee Term Loans remained competitive. However, given current market conditions, the Trust may explore refinancing options or raise additional funds through Non-Convertible Debentures (NCDs).

The composition of the Trust's outstanding debt, in terms of interest rate resets, indicates a diversified and balanced debt structure. Out of total debt, 28.83% have a fixed interest rate in form of NCDs, 23.46% have a fixed interest rate with yearly reset, 30.92% floating rate with 3-month reset frequency, and 16.78% floating rate with 12-month frequency.

Further, the summary of audited consolidated and standalone financial statements of Trust is provided below: Rs (in millions)
Particulars	Consolidated		Standalone
Â	FY 24-25	FY 23-24	FY 24-25	FY 23-24
Total Income	25,141.59	21,859.70	10,693.01	13,390.80
Total Expenditure	19,434.66	20,490.97	6,667.21	8,590.34
Profit Before Tax	5,706.93	1,368.73	4,025.80	4,800.46
Taxes	-235.76	-504.95	0.00	0.00
Profit After Tax	5,942.69	1,873.68	4,025.80	4,800.46
Other Comprehensive Income	3.08	-0.78	0.00	0.00
Total Comprehensive Income	5,945.77	1,872.90	4,025.80	4,800.46
Note: The standalone figures represent the financials of the Trust entity, while consolidated figure all Project SPVs			s include the performance of

 

Oriental InfraTrust ("Trust") is an irrevocable trust set up in June 2019 under the Indian Trusts Act, 1882 and is registered with the Securities and Exchange Board of India ("SEBI") as an Infrastructure Investment Trust under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, as amended.

The Trust currently holds a portfolio of six road assets, comprising five toll-road assets and one annuity road asset, located in the states of Maharashtra, Madhya Pradesh, Uttar Pradesh and Karnataka. These roads are operated and maintained under concessions granted by the National Highways Authority of India ("NHAI") and are owned and operated by Project Special Purpose Vehicles ("SPVs"). The Trust acquired a toll project from its sponsors in October 2022 - its first project acquisition post listing.

The sponsors of the Trust, Oriental Structural Engineers Private Limited ("OSEPL") and Oriental Tollways Private Limited ("OTPL"), are among the pioneers in Infrastructure development and construction in India. OSEPL has extensive experience in constructing both rigid and flexible pavements for roads, highways and airfields. Since its inception in 1971, the company has also undertaken the construction of bridges, flyovers and embankments using reinforced earth and earthwork techniques. Over the past five decades, OSEPL has executed major national and state highway projects in India and abroad.

OIT Infrastructure Management Limited is the Investment Manager of the Trust and Oriental Structural Engineers Private Limited is the Project Manager and the Maintenance Manager to the Project SPVs.

About Infrastructure Investment Trust in India

To attract Foreign Direct Investment ("FDI") in the infrastructure sector, the Government of India introduced an alternative financing mechanism in the form of Infrastructure

Investment Trusts ("InvITs") in 2014. InvITs are business trusts regulated by SEBI through "SEBI (Infrastructure Investment Trusts) Regulations, 2014. The primary objective of InvITs is to help infrastructure developers monetize their operational assets efficiently and reinvest the capital into under-construction assets, thereby deleveraging their balance sheets.

InvITs can be privately listed or publicly listed or unlisted, offering infrastructure developers flexibility in choosing an appropriate structure. They are managed by independent trustees and investment managers having requisite experience in the infrastructure sector. The board of an InvIT shall comprise of not less than six directors with at least one women independent director.

SEBI requires InvITs to invest at least 80% of their assets in completed and revenue-generating projects, and not more than 10% in under-construction projects. This ensures that InvITs are not exposed to some of the key risks inherent in the infrastructure sector such as availability of land, project execution risk, regulatory approvals, and time & cost overruns.

InvITs are required to distribute a minimum of 90% of their distributable income to investors at least once a year or twice a year, depending on whether they are private or public. InvITs are generally a pass-through structure and certain concessions have been accorded to them.

InvITs have emerged as a popular investment vehicle for holding operating infrastructure assets. Many sponsors and investors are adopting the InvIT structure to take advantage of the benefits it offers. Among the various asset classes, highways remain one of the most preferred.

Financial Statements

The Summary of Consolidated and Standalone Financial Statement of the Trust as on March 31st, 2025, are as follows:

Rs (in millions)
Particulars	Consolidated		Standalone
	FY 24-25	FY 23-24	FY 24-25	FY 23-24
Total Income	25,141.59	21,859.70	10,693.01	13,390.80
Total Expenditure	19,434.66	20,490.97	6,667.21	8,590.34
Profit Before Tax	5,706.93	1,368.73	4,025.80	4,800.46
Taxes	-235.76	-504.95	0.00	0.00
Profit After Tax	5,942.69	1,873.68	4,025.80	4,800.46
Other Comprehensive Income	3.08	-0.78	0.00	0.00
Total Comprehensive Income	5,945.77	1,872.90	4,025.80	4,800.46

Global Economic Overview

According to International Monetary Fund ("IMF"), World Economic Outlook ("WEO"), April 2025, the global economy is navigating a critical juncture characterized by significant policy shifts and heightened uncertainties. After a period that appeared to show stabilization, the outlook has become more challenging, with forecasts for global growth revised markedly downward compared to earlier expectations for

2025. This shift reflects the impact of factors such as escalating trade tensions, with effective tariff rates reaching levels not seen in a century, and a highly unpredictable geopolitical and economic environment.

Global growth is now projected to slow to 2.8% in 2025 and is anticipated to be 3.0% in 2026. This represents a notable deceleration from previous forecasts i.e., down from 3.3% for both years in the January 2025 WEO. The slowdown is broad-based:

•    Advanced economies are expected to see growth moderate to 1.4% in 2025. Within this group, growth in the United States is projected to slow to 1.8%, while the Euro Area is expected to grow by a more subdued 0.8%.

•    Emerging market and developing economies are also facing a more constrained environment, with growth forecast to slow to 3.7% in 2025, before picking up slightly to 3.9% in 2026.

On the inflation front, while the disinflationary trend continues, global headline inflation is expected to decline at a somewhat slower pace than previously anticipated. It is projected to reach 4.3% in 2025 and further decrease to 3.6% in 2026. Core inflation is generally expected to recede more gradually. Central banks remain focused on steering inflation back to target levels, though the path may be complicated by persistent underlying price pressures in some regions.

The global economic outlook is increasingly tilted to the downside, with several key risks driving this sentiment. Trade tensions and policy uncertainty are curbing investment and disrupting supply chains, while financial market volatility threatens tighter global conditions, especially for emerging markets. Geopolitical instability continues to endanger energy security and trade flows. Persistent inflation may prolong restrictive monetary policies, weighing on growth. Additionally, demographic shifts and rising social pressures further cloud the medium-term outlook.

In this complex environment, policymakers face the challenge of carefully calibrating responses.

The key priorities include:

•    Ensuring a smooth convergence of inflation to targets without unduly stifling economic activity.

•    Rebuilding fiscal buffers to prepare for future shocks, while protecting vulnerable populations.

•    Strengthening international cooperation to address global challenges, including promoting a stable and predictable trade environment, tackling climate change, and managing debt vulnerabilities.

•    Implementing structural reforms to reinvigorate medium-term growth prospects, including policies that promote healthy aging, enhance labor force participation, and boost productivity.

Indian Economy Overview

India's economy continues to demonstrate robust growth, positioning it as one of the fastest-expanding major economies globally. According to the International Monetary Fund ("IMF") in its World Economic Outlook (April 2025, released April 22, 2025), India's economy is projected to grow by 6.2% in 2025 (calendar year) and 6.3% in 2026 (calendar year). This outlook is supported by strong domestic demand and investment.

The Reserve Bank of India ("RBI"), in its Monetary Policy update on April 9, 2025, projected India's real GDP growth at 6.5% for the fiscal year 2025-26 (FY26).

India's economic ascent is further highlighted by the IMF data indicating that India overtook Japan to become the world's fourth-largest economy in 2025 by nominal GDP. Projections

suggest that India is on track to become the third-largest economy, potentially by 2027-2028.

The resilience of the Indian economy is attributed to strong domestic fundamentals, with both investment and consumption contributing to growth. While global headwinds may impact exports, significant public capital expenditure, particularly in infrastructure, is acting as a key growth catalyst, encouraging private sector investment.

Inflation Dynamics

Managing inflation remains a key priority. The Reserve Bank of India ("RBI"), in its April 9, 2025 Monetary Policy Statement, projected Consumer Price Index (CPI) inflation for FY26 at 4.0%, with quarterly estimates of 3.6% (Q1), 3.9% (Q2), 3.8% (Q3), and 4.4% (Q4). This projection aligns with the RBI's medium-term inflation target. While the overall trend points toward moderation, risks from extreme weather events and volatile global crude oil prices driven by geopolitical tensions persist.

Fiscal Indicators - Goods and Services Tax ("GST") Collections

GST collections continue to reflect strong economic activity. Gross GST revenue for May 2025 stood at ^2.01 lakh crore, marking a 16.4% year-on-year increase. This growth was driven by a 13.7% rise in domestic transactions and a 25.2% increase in imports, indicating broad-based momentum.

Outlook and Key Considerations

India's demographic advantages and a growth model increasingly driven by domestic resources underpin a strong economic outlook for FY26. However, sustaining this high growth trajectory will require continued focus on:

•    Leveraging the demographic dividend

•    Enhancing infrastructure

•    Promoting formal employment

•    Expanding the manufacturing sector.

Financial sector reforms and technological advancements are also laying a solid foundation for long term expansion.

While the overall outlook for FY26 remains positive, potential headwinds include rising crude oil prices and global supply chain disruptions. On the other hand, easing geopolitical uncertainties and the successful conclusion of Free Trade Agreements (FTAs) with key partners could significantly boost economic activity and confidence across sectors.

Roads and Highways Sector in India

India has the second largest road network in the world, spanning a total of 63.45 lakh kilometres. Roads, the most frequently used mode of transportation in the country, accounted for approximately 87% of passenger traffic and nearly 60% of freight traffic, according to Ministry of Road Transport and Highways ("MoRTH") as of September 2024. Although national highways constitute just 2% of the total road length (approximately 146,145 km), they carry about 40% of the total road traffic. The secondary road system comprising state roads and major district roads accounts for the remaining 60% of traffic and 98% of road length. Road transportation has steadily increased over the years due to improved connectivity

between cities, towns and villages. In India, both automobiles sales and freight movement by road are growing rapidly.

As of December 2024, the total length of National Highways stood at 146,195 km along with 2,474 km of national highspeed corridors. In FY24, approximately 12,300 km of National Highways were constructed. National highway construction in India recorded a 9.3% CAGR between FY16 and FY24. The government has provisional target of constructing 10,421 km of National Highways in FY25, a 15% decrease from the previous year's achievement, primarily due to delays in state clearances caused by extended election process. As of December FY25, the Ministry of Road Transport and National Highways had awarded a total length of 3,100 km.

Gati Shakti - National Master Plan

The Indian government launched the Gati Shakti-National Master Plan to promoter holistic and integrated infrastructure development, generating significant employment opportunities in the country. PM Gati Shakti has evaluated over 208 major infrastructure projects valued at more than US$ 180 billion, addressing 156 critical infrastructure gaps, particularly in last-mile connectivity for sectors such as coal, steel, fertilizers, and food distribution. The program has identified 81 high impact projects, with road infrastructure being the top priority. Major highway projects include:

•    Delhi-Mumbai expressway (1,350 kilometres),

•    Amritsar-Jamnagar expressway (1,257 kilometres)

•    Saharanpur-Dehradun expressway (210 kilometres).

The program aims to streamline the approval process through the Gati Shakti portal, which has fully digitized project clearances.

Investment and Policy Initiatives

The Union Minister of State for Road Transport and Highways has emphasized the government's commitment to boosting corporate investment in the roads and shipping sectors, supported by business-friendly strategies that balance profitability with effective project execution.

•    FDI inflows in construction development stood at Rs. 2,50,628 crore (US$ 35.24 billion) between April 2000-September 2024.

•    Private investments in the highway sector is expected to rise from around Rs. 20,000 crore (US$ 2.40 billion) annually to nearly Rs. 1 trillion (US$ 12 billion) over the next 6-7 years, according to Mr. Amit Kumar Ghosh, Additional Secretary, Ministry of Road Transport and Highways

Recent Government Initiatives and Developments

•    Under the Union Budget 2025-26, the government allocated Rs. 2,87,333.3 crore (US$24.79 billion) to the Ministry of Road Transport and Highways.

•    Capital expenditure allocation was increased to Rs. 11.21 lakh crore (US$ 129.0 billion), up 10.1% from the revised budget estimate of Rs. 10.18 lakh crore (US$ 117.2 billion) in FY25.

•    NHAI's debt burden reduced to INR 2,445.39 billion as of 31 March 2025 from INR 3,351.73 billion a year earlier,

due to the absence of incremental debt and prepayment of borrowings. Proceeds from InvITs were used to repay debt including prepayments of term loans and National Small Savings Fund borrowings.

•    In FY24-25, NHAI monetized assets worth 28,724 crore, including its highest-ever single-round InvIT receipt of ^17,738 crore. Monetization modes included Toll Operate Transfer (TOT), InvIT, and Toll Securitization.

•    The government approved eight national high-speed corridor projects, covering 936 kilometers at a total cost of Rs. 50,655 crore (US$ 6.09 billion).

•    A consultant has been appointed to advise on adopting new technologies like GNSS for barrier-free tolling, which will be piloted alongside FASTag on select National Highways.

•    The Bharat New Car Assessment Program ("BNCAP") was launched to provide safety ratings for passenger vehicles, empowering consumers to make informed decisions

•    The government is actively working to attract investors through policy reforms. Over 600 sites are planned for award by FY25, with 144 Wayside Amenities (WSAs) already awarded.

•    Over the next five years, NHAI is expected to generate ^1 lakh crore (US$ 14.3 billion) annually from tolls and other sources.

References: Indian Road Industry Report by IBEF, India Ratings, Crisil Report, OECD, RBI, IMF, Media Reports, Press Releases, NHAI website, Press Information Bureau (PIB)

Activities of the InvIT during the year, forecasts and future course of action

During the year, the total income and gains of the Trust stood at INR 10,693.01 million on a standalone basis. The Trust distributed Rs. 13.48 per unit to the Unitholders. The Trust did not undertake any refinancing of its debt, as the applicable interest rates on its Rupee Term Loans remained competitive compared to those offered by various banks and institutions during the year. However, considering prevailing debt market conditions, the Trust may consider refinancing and/ or availing additional borrowings by issuing Non-Convertible Debentures (NCDs) at the Trust level.

The composition of the Trust's outstanding debt, in terms of interest rate resets, indicates a diversified and balanced debt structure. Out of total debt, 28.83% have a fixed interest rate in form of NCDs, 23.46% have a fixed interest rate with yearly reset, 30.92% floating rate with 3-month reset frequency, and 16.78% floating rate with 12-month frequency.

CRISIL Ratings Limited ("CRISIL") reaffirmed its CRISIL AAA/Stable rating on the Trust's long-term bank facilities and reassigned its "CRISIL A1+ rating" to the short-term bank facilities . India Ratings reaffirmed the IND AAA/Stable rating for the Rupee Term Loan (RTL) and long-term issuer rating of the Trust.

Further, there was no disinvestment or sale of project entities during the year, and no change in the parties to the InvIT. Details of borrowings and lending activities are disclosed in the consolidated and standalone financial statements forming

part of the Annual Report. A summary of the valuation report is also included in the Annual Report, refer page no : 44.

During the year, Unitholders approved the conversion of the Trust from a Privately Listed Infrastructure Investment Trust to a Publicly Listed Infrastructure Investment Trust through a public issuance of units. The Trust is currently evaluating and undertaking necessary actions in accordance with the InvIT Documents and applicable laws.

FY26 Earnings Outlook

A.    Revenue Growth:

1.    The total projected revenue from all projects in FY26 is Rs. 2,491.9 Crore, reflecting a 5.1% over estimated performance of FY25.

2.    Toll projects revenue is projected at Rs. 1,910.3 Crores, a 6.8% increase over FY25 estimates.

3.    The projected increase in toll revenue of Rs. 121.4 Crores is attributed to:

•    Nagpur    Byepass:    Rs.    53.6    Crores    (44.1%

contribution),

•    Etawah    Chakeri:    Rs.    43.3    Crores    (35.7%

contribution),

•    Hungund Hospet:    Rs.    13.1    Crores    (10.8%

contribution), and

•    Biaora    Dewas:    Rs 12.8    Crores    (10.5%

contribution)

•    Indore Khal ghat's : Rs. 1.4 Crores (negative) (-1.2% contribution).

B.    Net Distributable Cashflows: Full-year NDCF is projected at Rs. 778 Crores, representing a 1.2% growth over the budgeted NDCF for FY25. This is primarily driven by operating performance, resulting in a projected yield of 13.3% in FY26.

Strategic Priorities for FY26

A. Conversion to a Publicly Listed Trust:

Objectives:

1.    Raising Capital for New Assets Acquisitions:

•    Portfolio expansion

•    Higher distributable cash flow

•    Improved yield potential for investors

2.    Strengthen OIT Balance Sheet :

•    Repay debt at the Trust and SPV levels

•    Improve leverage ratios

•    Sustain high credit rating

•    Enable access to lower cost debt for future acquisitions

3.    Attract New Classes of Investors:

•    Long-term yield-focused investors (e.g. pension funds, insurance companies)

•    Retail investors, if priced is attractive

4.    Enhance Distribution Potential

•    Acquire high-yielding assets to boost distributable cash flows, leading to:

o Increase payouts to unitholders o Strengthen long-term investor retention

B.    Acquisition of Rajiv Chowk Sohna Road Highway Project from Sponsor

¦    Qualitative Factors

o Being a Hybrid Annuity Model (HAM) project, the revenue received as annuities are relatively predictable and stable therefore, it would improve the asset risk profile of the OIT. o The annuities are inflation-indexed, which ensures long-term cash flow protection against inflation.

o The operations and maintenance of the asset will be undertaken by the Seller at a fixed price and escalation according to the agreements hence, the risk of unforeseen costs will be limited o The remaining concession period is 12 years and 3 months until June 2037 as of April 2025, which provides a long runway of predictable cashflows and increases the average residual asset life of OIT.

¦    Quantitative Factors

o Potential increase in NPV of overall NDCF by Rs. 43.9 Crores over the life of the Project. o The Net Asset Value to remain at the same level, despite of raising NCDs. o The weighted average (by route kilometer) residual project life of OIT will extend from ~9.02 Years to ~9.06 Years (cut-off date 31 March 2025)

o The asset portfolio ratio is currently 2.9:1 in favour of BOT asset in revenue terms. After this acquisition, the ratio will improve to 2.5:1 and balance the portfolio.

C.    Refinance Existing Debt with a Lower ROI Loans

The Reserve Bank of India ("RBI") has reduced the repo rate to 6.0% and adopted an accommodative stance, signaling potential for further easing to support growth amid global uncertainties and subdued inflation.

Interest Rate Outlook for the Next 12 Months

•    Further Rate Cuts expected: Analysts anticipate a reduction of 50-75 basis points, potentially lowering the repo rate down to 5.25%-5.50%.

•    Inflation Trends: Retail inflation declined to 3.34% in March 2025, the lowest in over five years, driven by easing food prices. The RBI projects inflation to remain around 4% in FY 2025-26.

•    Economic Growth outlook: India's GDP growth is forecasted to grow at 6.5% for FY 2025-26, with downside risks from global trade tensions and domestic demand fluctuations.

The Trust will continue to monitor lending rates and explore opportunities to refinance existing loans at lower interest rates to reduce debt servicing costs.