Indus Infra Trust (INDUSINVIT) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Indus Infra Trust Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kumar Singh, the Chief Executive Officer of the Investment Manager. Thank you, and over to you, sir.

Thanks, again. Hi, and very good afternoon everyone. At the outset, on behalf of Indus Infra Trust and GR Highways Investment Manager, Private Limited, I welcome you all to the third quarter of FY '25 earnings conference call of the Indus Infra Trust. I would like to take this moment to inform all of you that, as per the regulator's advisory, we have changed name of our InvIT from Bharat Highways InvIT to Indus Infra Trust. The name Indus Infra Trust embodies our continuous commitment to comprehensive infrastructure development across India and leveraging the opportunities in the Indian infrastructure sector. You all must be wondering why the name is Indus Infra. The term Indus resonates pretty well with our rich heritage of connectivity and economic progress, and is -- and also mirrors our mission to drive infrastructural advancement with sustainability and innovation at its core. I'll now take you through operational highlights of the Trust for the quarter, followed by financial highlights, and at the end, we'll move on to the Q&A session. As of December 31, 2024, the Trust had 8 HAM road assets, with an average balance of approx [ 11.4 ] years. For the same period, the outstanding annuities of the Project SPV stood at INR 6,729-odd crores, and 53 of the total 240 annuities have been received on time. An update on the acquisition strength. We continue to evaluate the ROFO as well as third-party assets. We have received 1 proposal from GR Infra to acquire one of their HAM assets, and we have already initiated our necessary diligence on that. We'll keep you all informed with respect to those acquisition development. If you get into our financial performance, we have successfully optimized our operational efficiency, and have maintained a robust financial position with our current leverages at around 27%. This reflects our commitment of creating a long-term value for our investors. The Board of Directors of the Investment Manager in yesterday's board meeting approved a DPU of INR 2.75 for Q3 FY '25, further broken into interest and dividend, interest of INR 2.51 per unit, and dividend of INR 0.24 per unit. Including the current announced DPU of INR 2.75 per unit, our cumulative DPU at the end of the third quarter stands at INR 11.95 per unit. I'm very pleased to inform you that, we have already surpassed the guidance given at the time of listing of our InvIT in the 9 months itself. Also quick update on the road sector. Cumulative award for the year 2025 to date, that is up to December 31, 2024, is 3,100 kilometers, and cumulative construction for the same period is 5,853 kilometers. The Ministry of Road Transport and Highways has incurred almost INR 225,000 crores till December 2024. The budgetary support for the roads and highway sector has grown almost 8x in the last decade, and allocation grew at a CAGR of almost 22% following the announcement of Bharatmala Pariyojana. With the same enthusiasm, we also expect the Center to increase the allocation for the sector in the coming budget to reaffirming its commitment to NIP, which is National Infrastructure Pipeline. It's my firm belief that, InvITs are expected to play a greater role to garner private capital for the development of national highways in the short, as well as medium and long-term. If you say as per the industry reports, the assets under management of road sector of InvITs is expected to rise from INR 1.9 trillion, which is almost INR 190,000 crores in September '24, to INR 3.2 trillion, which is INR 320,000 crores by March '26. So there's a huge opportunity available for the InvITs to acquire road assets, which are set to become operational in the next 2 to 3 years. And we, as Indus Infra Trust, strive to add a decent chunk of high-quality road infrastructure projects to our portfolio. As we move forward, Indus Infra Trust remains steadfast in its mission to contribute to nation's infrastructure growth, while delivering a growing and steady returns to our unit holders. Our strategic rebranding, our healthy balance sheet, our ROFO and non-ROFO asset pipeline, and the immense opportunity we see around positions us for a sustained success in the years to come. Now, without taking much of your time, I'll now pass it on to Harshael who will take you through the financial details before we reopen up for questions. Thank you. Over to you, Harshael.

Thanks, Amit. Coming to Q3 FY '25 performance on a standalone basis, the interest income on the loan extended by the trust to the SPVs was INR 179 crores, approximately, as against INR 147.8-odd crores in quarter 2 FY '25. The increase in the interest income was on account of acquisition of Aligarh-Kanpur project, which contributed around INR 34.8 crores during the quarter, as against a contribution of INR 3 crores during the second quarter. Dividend received during the quarter from SPVs was INR 26.75 crores, which was utilized for distribution during the last quarter. Further on the EBITDA front, EBITDA for the quarter was around INR 204.81 crores, adjusted for the diminution in value of investment. The diminution was on account of difference between the fair value and book value of investment, and primarily was on account of the amount of cash, which was upstreamed by the SPVs. The total external borrowing at the trust level stands at INR 1,789 crores, and the interest cost on the same was around INR 37 crores during the quarter. The increase in interest cost by approximately INR 12.8 crores was on account of additional borrowing availed for refinancing of external debt of Aligarh-Kanpur during the month of September '25. With respect to the tax outflows, tax outflows on the other income which is earned by the trust at the rate of 42.74%. On a consolidated basis, the total income for the quarter was INR 224.5 crores, consisting of INR 210 crores of revenue from operations and other income of around INR 14-odd crores. The increase in the total income was primarily on account of increase in finance income, on account of acquisition of Aligarh-Kanpur project. The EBITDA for the period was around INR 163 crores. In relation to NDCF at the trust level, the Project SPVs have declared a dividend amounting to INR 17.1 crores for Q3 FY '25, and interest income received for the quarter was around INR 179-odd crores, resulting in total cash upstream to the InvIT of around INR 196 crores. Post adjusting for finance cost, DESTA and Trust level expenses, which is given on Slide 8 of the presentation, the NDCF works out to INR 122.69 crores. The Board has declared -- as Amit mentioned earlier, the Board has made a declaration of distribution of INR 2.75 per unit, breakup of which comprised of INR 2.51 in the form of interest and INR 0.24 in the form of dividend. As per the recent amendment in SEBI InvIT regulation, the distribution has to be made within 5 working days from the record date. The record date for this particular distribution will be February 3, 2025, that is Monday. Thank you, and we are open to questions now.

[Operator Instructions] The first question is from the line of Arya Mehta from Maximal Capital.

So sir, of this INR 9.2 which has been distributed, I think some portion would be attributed to March '24 month also, right? So for this year, how much should we factor in as distributed for this year for the 9 months?

See, actually, for the March, because we got listed in -- on the 12 of March, right? So if you see in our calculation, what we see that basically -- since basically, we have started enjoying or using the capital on 12 March '24 onwards. So we see from that, that 12 March, '24 onwards till 31 December 2024, which is 9 months and maybe a tad above 9 months. Basically, we have distributed already, or we have announced to distribute already INR 11.95 which is, of course, was higher than the guidance what we had given at time of InvIT. For the quarter, which is 1 quarter pending, of course, we need to see how much basically SPVs streams, how much we are going to receive in the form of interest and then we'll decide because there are maybe other expenses also with respect to acquisitions and all. So that we'll see and then maybe we'll decide and formalize it post the end of the quarter.

Yes. So if we annualize the thing, including, let's say, 2/3 of March, then it is coming to around INR 11.4. So that's a fair assumption, right, for the year?

Yes. So I think guidance was INR 11 -- even if you see that way, the guidance was INR 11.5 and maybe for the 9 months itself, the INR 11.4 is done already, right?

No, INR 11.4 is the annualized number, if we take into account 20-odd days for March.

You're saying that, you -- maybe 20 days of the March, you set aside and then you -- INR 11.95 for the 9 months, I think annualized number will be more, not INR 11.4, because March had only 20 days odd, right? And then we have 9 months, and we already got INR 11.95. So it's like 9 months, 20 days, if you're getting INR 11.95 annualized, even you take the 20 days aside, I think, there definitely is going to be more than INR 11.4.

Okay. Okay. So that is one. And secondly, any guidance on what we can do next year in terms of distribution?

See, guidance, while -- the guidance what we had given for at the time of IPO, which was, I think, INR 11.5 right, we stick to that guidance. I'm not changing that guidance as of now.

Okay. Okay. And what is -- how much more AUM can we expect to add in the next -- in this financial year and next financial year as things stand now?

See, we are -- as I mentioned in my call, right, there's one basically proposal which we have already received from GR for one of the HAM assets. I think, there we have already started our diligence. And only thing is that, as per InvIT, you can take asset only once its revenue generation crosses 1 year revenue generation history. The second annuity of that asset is expected around first half of April. So definitely, we are going to acquire that asset during the month of April, and which we had thought that we may acquire in the March itself. We have already applied. I think the NHAI NOC and lender NOC has already been applied by GR. So that should be on time. But I think with the 6, 7 days here and there, I think that March may become the first half of April. For the next year, we have almost definitely 3 to 4 assets of GR, which is lined up for the acquisition. And for the non-GR assets, of course, we'll keep you guys updated, if we move forward in that range. But I think you can say safely for the next year, 4 to 5 assets acquisition of GR, non-GR we'll let you know once we move significantly move ahead in that -- in those directions.

And each of these assets, we should assume INR 700 crores, INR 800 crores of AUM addition?

AUM addition is -- yes, you can say ballpark -- on a ballpark basis, average, yes, maybe INR 600 crores to INR 800-odd crores in terms of AUM.

Yes, yes, yes.

Because all these assets are north of INR 1,000 crores, but it's like 40% NHAI and it's only 60% what you have to do, right? So I think, yes, you can say safely on the safer side, INR 600 crores to INR 700 crores, yes.

Okay. Okay. And in terms of our debt to AUM, where do we stand now? And have we been able to reduce the debt cost in these 3 months?

See, debt to AUM, I had mentioned, it's right now currently, as we speak, it stands at around 27%. Our debt cost, we could not reduce, because the borrowing what we did was at InvIT level was linked to repo. And you see, right, in the last 1 year, repo has not changed. RBI has kept it same. So that's why the spread was fixed, and there's nothing changed so that we can go to lenders and ask for that. So as of now, it remains at 8.1%, which we had borrowed. So two times we borrowed, one at the time of InvIT when we acquired asset, and the second time when we bought this eighth asset of ours, which was GR Aligarh-Kanpur. But our cost is 8.1% only, which has not changed because linked to repo and RBI has not changed that.

Okay. These are in the form of NCDs or what's the nature of the debt?

It's in the form of loan only.

The next question is from the line of Anant Mundra from Mytemple Capital.

Sir, approximately INR 137 crores has been retained at the SPV level. What is that for?

Yes. So Anant, there are current liabilities sitting in the books of the SPV. So that's why there is a retention at the SPV level to meet those obligations.

Okay. That's against current liabilities. All right.

Yes, yes.

And sir, this -- by the end of this year, I think in the earlier call, you had mentioned that you were looking to acquire around 2 assets. So one, you said you already received one interest from GR Infra. This other asset was also a GR asset or a non-GR asset?

That was non-GR asset, and basically, we'll be disclosing about that at the opportune time.

Okay. Okay. So sir, when it comes to non-GR assets, how would you take care of, say, the maintenance risk and the other contingent liabilities that are there on the assets? And what kind of IRR would you look for when it's a non-GR asset?

See, I think there's a very defined framework. IRR, if you remember, we have been mentioning on our call that whatever yield we create, the asset what we acquire at IRR should be at IRR which actually provides an uptick of my yield. So my yield should become yield -- acquisition rather should become yield accretive with every incremental asset acquisition. So, suppose we are trading at currently, say, 10.5%, 11%. I'll try to make an acquired IRR, of course, which is north of 11%, which could be 11.5%, which could be 12% so that my -- currently, basically yield becomes -- or maybe my price becomes yield accretive, that acquisition rather becomes yield accretive. So non-GR assets, of course, we'll be looking to acquire basically higher to what we are acquiring. In terms of O&M, actually, if you see what we are doing is that whenever we do -- after giving NBO, suppose, we'll go ahead, there's a proper diligence. So in terms of, we'll appoint a third-party technical consultant. So first, when we go, of course, we have in-house team as well, which we take and basis that we give a nonbinding, and nonbinding will get signed. Post that, we appoint basically technical and that will be of repute -- so reputed technical consultant, who will give their technical number, and I suppose O&M number, major maintenance number. Those numbers -- and then, of course, because we -- ultimately, GR has to do the O&M and major maintenance to Aadharshila. So they will also do their internal numbers, right? Those numbers have to match or maybe if there's any issue, those have to reconcile. Finally, the O&M numbers what's given by the consultant or whatever GR decides is the final number. That number gets inputted in our model and then finally, whatever value arrives, that value, subject to, of course, the target IRR we have, we basically go and final -- will do the deal at that value. So this is the framework what we have. And of course, other than technical, you will do all the other like there's tax, whether it's a DD, whether there's FDD, everything will be done, insurance, so legal. So everything will be done from -- and generally, we don't cut corners, all the big 4s and all the -- maybe the reputed ones are there who are doing our DDs. In terms of O&M, yes, that's the framework, and we are following that framework.

So, even if it's a non-GR asset, the maintenance will be managed by Aadharshila only. That understanding is correct, right, sir?

Absolutely. Aadharshila and of course, through Aadharshila, and GR will do it.

Okay. Got it. Got it. And sir, so next year, we have guided for maybe, say, 4 asset acquisition. So, where do you see the debt level -- so debt by AUM, like will we reach the 49% next year? I'm just trying to understand when is it that we would require a next round of fundraise? When will we exhaust our limit?

See, I'll tell you, directly coming to your second part, because right now I'm 27 and I'll take, say, 2, 3 more assets, I'll be at 44, 45. But in terms of my fund raise, it will be towards the latter part of the next half, which will be, say, September to December quarter. We will -- we may come further because we have 4 assets and those 4 assets, I think in terms of AUM will be somewhere around INR 3,000 crores. So if I do INR 3,000 crores, and if I do a debt equity, say, even of 60%, I'll have to have INR 1,800 crores of the debt. So with INR 1,800 crores, I'll be INR 3,600 crores. So, of course my AUM will also increase. But I think, I may have to come and depending on the non-other GR assets also, I may have to come to the market next year, depending on how I'm able to conclude those acquisitions, I think maybe either third or fourth quarter of next year. That's what the time line, I think, ballpark basically, tentatively what I look at.

Got it. Got it. And sir, one of your -- I mean, there was a recently listed competitor. So I was just looking at their cost of debt. Their cost of debt is around 7.8%, whereas we are at 8.1%. So why is there -- it's a big gap. So is -- I mean, are the terms different for us versus them? I mean, how is there such a big difference here?

See, Anant, to be honest, I wouldn't want to comment on the competition's cost of debt or competition's framework for, because it's not only cost of debt, a lot of things will be different. So I actually would want to focus on my performance and bettering my operational highlights. But one thing I can tell you is that, the 13-year, 14-years loan what I'm taking, and the tenure what I'm taking, 8.1%, which is a spread of 160 over the repo, I doubt that very few people in the market would have been getting that kind of rates. Of course, when I can go and do the bond, I can get it to a cheaper rate, which is 1 year, 2 years, 3 years. So you can't compare actually a 1-year, 2-year bond with a 13-year loan or 14-year loan. And actually, it's linked to repo, right? Once my repo will get -- RBI starts, so my rate will also start coming in. So with 25 bps cut, I will directly come down to 785.

Okay. Got it. Got it.

But in the bond in the 3-year structure, you get stuck with that pricing, right?

Yes.

So, a lot of deliberation was done before InvIT itself. And I think the pricing what we got with our thought process, our estimation of the rate cut, our estimation of the repo movement, our estimation of how U.S. is behaving, how U.S. is sneezing and India catching the cold because of that, I think with all that, we thought of going ahead with this. And I still think that, my pricing is one of the best pricing we enjoy in the industry.

Got it. Got it. And sir, so there are other deals also that are happening. So like Ashoka has recently sold its HAM portfolio, I think, to one of KKR or Macquarie or someone. I'm not sure who.

Sekura.

Sekura, okay. So I mean, typically, what are the -- I mean, there are a lot of deals that are happening in the market. So typically, what equity IRR are these deals happening at?

Difficult to attribute any value, Anant. We may have to check with those guys because it's all the confidential data, which doesn't get shared in the market.

Okay. So I mean, were we not involved in these kind of discussions? Or I mean, did we try to bid for these assets or?

No. So the -- which one you said? Of course, we had bidded for that. But of course, there were some valuation mismatch. So that's why we couldn't go. But we were like the one who had looked at this asset, entire 11, 12 assets almost 1, 1.5 years back, 1.5 years back.

Okay. So I'm just trying to understand because, I mean, given the InvIT structure that we have and given our cost of capital, it will be difficult for anyone to beat that. So I just want to understand where -- I mean, are we very off from the market? I mean, I can't imagine why someone would not -- why would an InvIT not get the deal versus someone else bidding more competitively given that our structure is far, far better and more efficient.

Anant, there are a lot of reasons for that. If I'll start outlining the reasons, it will take longer. But one thing I can tell you is that, if your InvIT takes -- will take any asset, of course, one thing, we would want to be very sure of the quality, right? Because we are already have 8 assets of the -- from a guy who is literally is a good quality player. So we actually -- what we do is we benchmark that quality with every incremental asset which we plan to take. Now what happen is that the moment you would want to compromise the quality of 1 asset, whatever the return you would have made on the 8 or 9 or 10 other assets will get equalized. So -- so that's why we are not very fancy of, say, acquiring a portfolio, because when you acquire a portfolio, you might get good asset, may not get so good asset also. So we actually maybe do more diligence, I would say. We take more time. We remain a little conservative. And we think that maybe in the long term that conservatism will play off -- will pay off more and will play out better.

Got it, got it, sir. That explains it quite well. That's it from mine.

The next question is from the line of Vivek Agarwal from [ DV Investments ].

My question was regarding this retention of INR 137-odd crores. You told it was against current liabilities. These SPVs will have this amount of current liabilities or it is earmarked for some other purpose? Why because SEBI has also told that you have to distribute 90% of your cash flows, and we are retaining a significant amount. It's like INR 3 per unit.

So Vivek, there are certain prior period claims also which are received during this period and which has not been paid out yet. So that's why the number is looking a bit on the higher end. Further, for the 9 months period, whatever is our O&M expenditures, the billing happens on a 6-monthly basis. So for the 9 months, the entire provision is sitting in the books. So that is the reason the number is appearing a bit higher.

Maybe you can see in the next quarter, Vivek, next quarter, this will get balanced out. So this is just, you can say, a timing mismatch. Yes.

Fair enough, sir, fair enough. And we have done a retention of INR 60 crores or INR 59.2 crores in Q2 last year -- Q2 last quarter, that should have been reversed and it would have got distributed this quarter or that become cash continued?

That was towards -- because there was a debt service requirement in Aligarh-Kanpur where we had not received the no-due certificate from the lender. So that's why that amount was blocked. Unfortunately, it was encumbered. And that has been subsequently leased and that particular SPV, as I mentioned, has contributed towards the interest income during this quarter. Because the annuity is not received in that particular SPV during this period post acquisition.

Okay. So that cash has been used in that way?

Yes.

Okay. And again, DSRA, we have retained this quarter, we have not taken any fresh borrowing. And last quarter, we have retained some DSRA. So again, there is some DSRA requirement or this is like some?

No, this is not retained. So there is a repayment profile based on which for the ensuing 3 months, we keep on creating DSRA. So there was a requirement…

It keeps going up and down.

Yes. So that is the reason why there was an additional outflow required in this particular quarter.

So Vivek, as of now, it's only 8 assets. The moment you will acquire more assets, right, DSRA requirements may go up down. So basically, depending on the investment.

That I understood. I was just thinking that in the quarter if you don't raise any debt, then there shouldn't be any other DSRA unless the repayment profile changes.

Yes.

So that's why telling the repayment profile would have changed and therefore you're repaying.

Yes.

So taxability, are you guys thinking in some way how to make the distributions more tax efficient as we go forward?

Yes, definitely, Vivek. So I think, I know where you're coming from. So right, initially, what happens, because your SPVs and all would have the positive balance, right? So of course, you basically distribute the surplus, which actually gets distributed in the form of dividend. And of course, the interest what you're charging, which goes as. But I think going forward I think this will change definitely. And then you start seeing more as a capital repayment, I think, which will take care of your taxability portion.

The next follow-up question is from the line of Arya Mehta from Maximal Capital.

So just a couple of follow-ups. One is what is the NAV right now?

I think the NAV basis the September valuation, which was done, was in the range of around INR 114, INR 113-odd something, was INR 113, INR 114.

Yes. And on the further acquisitions part in terms of pricing and yield accretion, just wanted some more clarity. So see, right now, on the INR 11.5 sort of a distribution, you are trading at, let's say, 10% yield for the unitholders, right? And your cost of debt is 8%. So now when you acquire an asset, how are you looking at it? There are project IRRs. Are you looking at 10% project IRR, which will give us maybe 12% sort of an equity IRR because you will be acquiring using 8% debt? Or are you looking at equity IRRs itself to be 10% or maybe 10.5% in that range?

So we don't look at project IRR first. We look at equity IRR only. And equity IRR, what we are looking right now, so like, if you see like -- take the example of the last asset acquisition, while it was from GR only. So we do -- we did an acquisition, and we had told -- we have mentioned on the call as well that, that acquisition actually helped us to take the yield from 11.5% to almost 11.9% to around range of 11.9% to 12%-ish, almost 45, 50 bps was the yield up, basically yield went up because of those acquisitions. So it's not that, I'm right now, say, for example, I'm trading at, say, 10%, 10.5% yield, I will do at 10.5% only. Of course, I'll strive for the best, right, whether it will be 11.5%, it could be 12%, it could be 13%, it could be 14%, whatever that number. But the point what happens is that once my repo moves down, right -- comes down, of course, I'll have some impact of that as well. So keeping that thing in mind, that's why we say that our acquisition at any point of time is going to be yield accretive. The reason being that whether even I get 11.5%, because we also do a lot of sensitivity data on acquiring, right, that how the interest rate movement will happen. So basically, then overall, this asset will give me how much.

Interest rate movement, we understand, but right now, you are trading at 10%, INR 11.5 divided by INR 1,100, INR 1,300, INR 1,400. So that is 10%. So you are looking at 10% to 10.5% sort of equity IRR? Or are you looking at?

No, no. I think just more than that, not that.

Okay. And in terms of the debt itself, like any particular reason why we have taken repo-link debt instead of maybe trying to get fixed rate long tenured debt because on the distribution side, we have HAM assets, which are basically fixed. So then on the -- there can be a mismatch between the 2 should the interest rates go up.

No, it's a very interesting question. I think we had -- at the time of when we were doing the IPO, we had explained it. So in a HAM asset, maybe I'll just take a minute to explain to you again. HAM asset, what happens is that INR 100 is the cost. Authority gives you INR 40 during construction and INR 60 authority gives you during the operation period, which is 15 years, right? And then authority also pays the interest on that INR 60. So the 8 assets what we have now, they are basically authority pays -- is paying me interest on annuities, which is linked to base rate. Base rate is nothing but repo plus 25 bps. So what I'm getting actually the interest from authority on those outstanding annuities is at the rate of repo plus 325 bps. While what we could negotiate from lenders is -- so okay. So why did we take linked to repo? Because what I'm getting from authority is linked to repo or linked to base rate, which is again in terms of repo plus 325 bps. So we thought that, let's take loan, which is underlying linked to repo itself so that my inflow and outflow becomes the links -- gets linked to same benchmark, which is repo.

Does it nullify fully? Does it nullify the impact fully?

No, it's not entire because it will nullify to the extent of my leverage. But the point is that suppose my leverage goes to 60%, 65%. So my 2/3 of that will get nullified. Second thing is, if I say -- if I take a fixed -- I don't know, we can deliberate on that, but maybe whether this is a proper time to say, take something up 3-years, 5-years, 7-years fixed, then you can see that maybe in the next -- I'm not -- that I can't forecast, but maybe you can see that our interest rate cut down over the next 3 to 6 months. So should we basically lock us ourselves by taking a, say, longer-term loan or maybe we should keep it flexible. And then when suppose interest rates move down and we are at a reasonably, say, subdued interest cycle, that time we should take something which is fixed for the, say, 5-years, 7-years and get our outflows locked. So that is the viewpoint we have taken. And that time, we had a discussion with rating agencies, investors, and they like it, that okay, I think your inflow outflow get linked to the same. So I think then what happens, it takes care of your variability.

The next question is from the line of Ankit from Kotak Bank.

I just have 2 questions. One is on the incremental acquisition which you want to do from third-party assets and from GR. Will the indemnity clause will remain, which was there for initial assets because we have seen in Varanasi Sangam, there was deduction in payments. So how are we taking care of it?

Yes, yes. So most of the clauses, which were there earlier will remain as same.

For third-party assets only?

Yes.

Okay. And on -- so since we are planning to acquire 4 more assets, so just wanted to check. So we will be -- so after distribution, we can increase our leverage to more than 49%. So with this 4 to 5 acquisitions, where will be our leverage? And at what point -- at what leverage level we'll be looking to raise another equity?

See, it depends. SEBI has floated a consultation paper where they are saying that basically, you may increase your leverage from 49% to 70%, if you would have completed your 6 quarterly distributions.

Correct.

In our case, I think we have already completed our 4 quarterly distributions. So with March and June, we'll be completing 6. So if that consultation paper -- see, I don't know, I'm just saying that, if it gets formalized, then maybe after June itself, we should be able to raise our leverage from 49% to 70%. So in that case, I can still acquire almost INR 6,000 crores, INR 7,000 crores of the value of the asset without raising any equity. So I think I had given the answer of this as well that depends what time I'm acquiring, what value of the asset. But if everything goes as well as planned, we may look to raise equity sometime maybe September, December or March quarter next year, not September, December or March quarter next year.

Okay. So my question was specifically, is there an internal threshold that we'll maximize up to 60%? And after that, we'll go for equity raise or we can raise below that level? That was the question.

See, the criteria is 49% and 70%. But since we are the listed player, you don't want to have some threshold that tomorrow if anything happens, say, for example, when the price moves down, right, or maybe basically because of that, some AUM comes down because if anything happens, you should have some threshold. You may want to give say 5% to 10% of the -- some safe thing on your thing. So maybe you -- once you touch 65%, you should not take more. In 49%, the moment you touch 45%, 46%, you should not take more leverage. That's kind of the threshold we have now.

[Operator Instructions] The next follow-up question is from the line of Anant from Mytemple Capital.

Sir, you just explained that how through the acquisition of 1 asset, our payout has actually increased from 11.5% to 11.8%, 11.9%. So just wanted to understand, assuming everything else remains the same and we acquire new assets at the same IRR of -- equity IRR of about 12% that we've done for the first asset and we leverage up to 65%, what do you think this yield which is currently at 11.8%, 11.9%, that can go up to?

So Anant, every asset acquisition cannot be at the 12%, to be honest, because I said, I always maintain that it will be incremental to the yield I'm trading. So first, I could negotiate 12% doesn't mean that everything I'll negotiate at 12%. It could be lesser. So depending what the best I can negotiate, because when we negotiate with GR, it's like 1/3 complete on the arm's length basis. So what finally I could negotiate and get the final -- with GR and could get the final rate, that will only decide basically what kind of yield I'll be. So it's not that every asset acquisition will keep increasing 40, 50 bps. Otherwise, then with the 4 asset, 5 asset, we will cross 14%, 15%. That is very highly unlikely case. But yes, as I said, I've been maintaining that whatever yield we are trading, we will ensure that my incremental asset acquisition becomes yield accretive, but that 12% should not be taken as a benchmark.

But sir, the equity IRR of 12% is not a very big ask on the 30% because the project IRR then becomes -- I mean, shouldn't 12% be our internal benchmark as well, at least?

Anant, again, I would say that, it's a function of the asset you are buying. So I agree with you that internal benchmark should be 12%. Answer is yes, it should be. But then will you get every asset at 12%? My answer is I don't know. So that's why I'm not -- I can't say that, 12% should be because today, I may negotiate 12%, tomorrow maybe it could be 11.5%, could be 11.25%, could be 11.75%. That's why I'm not saying that it should be 12%. But yes, if interest rate moves down, even I do at 11.5%, that will also become a good yield accretive. So that's why I said to you that, every incremental asset accretion will be yield accretive that will ensure for sure.

[Operator Instructions] As there are no further questions from the participants. I would now like to hand the conference over to Mr. Amit Kumar Singh for closing comments.

So thanks, Sejal. And again, thanks all of you, all the unitholders for joining this call, all the investors for joining this call, and reaffirm our commitment to keep growing this platform and keep delivering the desired returns to all our unitholders. Thank you so much. Thanks.

Thank you. On behalf of Indus Infra Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.