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    Capital Infra

    CAPINVIT
    Construction·18 Nov 2025
    Management Summary

    Capital Infra Trust reported a mixed Q2 FY26, with strong operational progress and strategic deleveraging overshadowed by one-off financial impacts. The company successfully reduced net debt to 45.6% and is on track to acquire three value-accretive HAM assets, boosting AUM by over 60% to INR 6,800 crores by FY26. However, H1 FY26 net profit was significantly reduced by a Q1 loss and an impairment charge related to financial asset modification and interim distributions. Management remains committed to consistent DPU and targets an AUM of INR 10,000 crores by FY27.

    Highlights

    5
    • Net debt reduced from ~55% in June 2025 to 45.6% as of November 14, 2025, following a preferential issue of INR 345 crores.

    • On track to acquire three operational ROFO HAM assets (Jodhpur Ring Road, Hasanpur-Bakhtiyarpur, Champa-Korba) within two months, adding 164 kms and increasing AUM by over 60% to INR 6,800 crores by FY26.

    • Asset acquisitions are at a 9% discount to the enterprise value of INR 2,590 crores, ensuring value accretion.

    • Board approved Q2 FY26 distribution of INR 3.25 per unit, totaling INR 103.6 crores, maintaining consistent DPU.

    • Annuity receipts stood at INR 523 crores, in line with estimates.

    Concerns

    2
    • H1 FY26 net profit of INR 5 crores was significantly impacted by a net loss of INR 73 crores in Q1 FY26 due to a modification loss on financial assets (75 bps RBI rate change).

    • An impairment of INR 311 crores in investment value was booked in H1 FY26, primarily due to interim distribution of INR 307 crores to unitholders in June 2025, bank rate changes, and pending GST claims.

    Key financials

    Metrics

    6

    Periods

    4

    Headline

    1
    • AUM (Current)
      ₹4,282 Cr

    Q2 FY26

    1
    • Net Profit
      ₹78 Cr

    H1 FY26

    3
    • Total Income
      ₹393 Cr
    • Net Profit
      ₹5 Cr
    • DPU
      ₹6.86

    H1 FY26 Standalone

    1
    • EBITDA
      ₹399 Cr

    Order Book

    high confidence

    Total Value

    ₹ 4,282 crores

    as of 2025-09-30

    quantified

    Inflow this qtr

    ₹ 2,590 crores

    Execution

    on track to add three operational ROFO assets within the next two months

    Pipeline

    qualified rfp

    Pipeline of 17 ROFO assets from sponsor and third-party acquisitions

    "The company is on track to acquire three operational ROFO assets, which will significantly increase AUM and are being acquired at a discount, ensuring value accretion. A robust pipeline of 17 ROFO assets and third-party acquisitions supports future AUM growth targets."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Cost 7.6%

    Dividend

    ₹3.25/share (interim)

    M&A

    Jodhpur Ring Road, Hasanpur-Bakhtiyarpur, Champa-Korba HAM assets

    acquisition · pending regulatory · Consideration ₹NaN (mixed)

    Guidance & targets

    8
    CategoryTargetPriority
    Debt
    Leverage Ratio
    45% to 47%
    High
    Debt
    Long-term Leverage to AUM
    55% to 60%
    Medium
    Debt
    Debt Repayment
    INR 420 crores
    High
    AUM
    AUM Growth
    INR 6,800 crores
    High
    AUM
    AUM Target
    INR 10,000 crores
    High
    Acquisition
    3 ROFO Asset Acquisition Timeline
    60 to 90 days
    High
    Acquisition
    Future ROFO Asset Readiness
    4 to 5 assets by June-July next year; 2 to 3 assets by end of FY27
    Medium
    Distribution
    Cash Yield
    10% to 12%
    Medium

    Completion of 3 ROFO Asset Acquisitions

    Within next 60-90 days (by February 2026).
    CurrentOn track, unitholder approval received.
    TargetAcquisitions closed, assets integrated.

    Why it matters

    Key growth driver, expected to increase AUM by over 60% and be value-accretive.

    we are working on raising both equity and debt capital to finance the acquisition. And we intend to close out over the next 60 to 90 days from today.

    How to verify

    capital_allocation.m_and_a[target='Jodhpur Ring Road, Hasanpur-Bakhtiyarpur, Champa-Korba'].status

    Risks & concerns

    3
    RiskSeverity

    Modification Loss on Financial Assets

    A net loss of INR 73 crores in Q1 FY26 was due to modification loss on financial assets from a 75 bps RBI rate change, impacting H1 FY26 net profit.Management acknowledged

    medium

    Impairment in Investment Value

    An impairment of INR 311 crores in investment value was booked in H1 FY26, primarily due to interim distribution to unitholders, bank rate changes, and pending GST claims.Management acknowledged

    medium

    Slowdown in NHAI Project Awards

    The number of projects awarded by NHAI has been relatively less in the last 12 months compared to the previous cycle, though management expects activity to pick up in H2 FY26.Management acknowledged

    medium

    Q&A highlights

    8

    “As of now, the average cost of our current borrowings is around 7.6%. ... We will maintain a conservative approach in our future borrowings, with a clear focus on keeping the leverage in the range of 45% to 47% in the short term. ... The additional borrowings which we are going to take, will try to bring it in the form of term loans which are linked to repo-rate so that there is a natural hedge between the inflows which we receive and our intrinsic expenditure.”

    Provides a clear strategy on debt management, cost reduction, and leverage targets, crucial for an InvIT's financial health and stability.

    asked by Mr. Pravesh Kumavat

    3 min read6 chapters

    Detailed Narrative

    01

    Balance Sheet Strengthening & Deleveraging Initiatives

    Capital Infra Trust successfully strengthened its balance sheet by completing a preferential issue of INR 345 crores, which contributed to reducing net debt from ~55% in June 2025 to 45.6% as of November 14, 2025. The company plans to repay an additional INR 420 crores of existing borrowings by December 2025, utilizing INR 345 crores from the preferential allotment and INR 75 crores from internal accruals. This strategic deleveraging aims to maintain leverage within the 45-47% range in the short term and lower overall financial costs.

    02

    Strategic Asset Acquisitions & AUM Growth Roadmap

    The InvIT is on track to acquire three operational HAM assets (Jodhpur Ring Road, Hasanpur-Bakhtiyarpur, Champa-Korba) within the next 60-90 days. These acquisitions, valued at an enterprise value of INR 2,590 crores and secured at a 9% discount, will add 164 kms of highways and are projected to increase AUM by over 60% from INR 4,282 crores to approximately INR 6,800 crores by FY26. The long-term roadmap targets an AUM of at least INR 10,000 crores by FY27, supported by a pipeline of 17 ROFO assets and potential third-party acquisitions.

    03

    H1 FY26 Financial Performance and One-off Impacts

    For H1 FY26, Capital Infra Trust reported a total income of INR 393 crores and a net profit of INR 5 crores. While Q2 FY26 saw a net profit of INR 78 crores, this was significantly offset by a net loss of INR 73 crores in Q1 FY26. This Q1 loss was primarily attributed to a modification loss on financial assets resulting from a 75 bps change in RBI's bank rate. Additionally, an impairment of INR 311 crores in investment value was booked in H1 FY26, mainly due to interim distributions to unitholders and pending GST claims.

    04

    Consistent Distribution to Unitholders

    The board approved a distribution of INR 3.25 per unit for Q2 FY26, totaling INR 103.6 crores, bringing the cumulative DPU for H1 FY26 to INR 6.86 per unit (INR 3.61 for Q1 and INR 3.25 for Q2). Since inception, the company has declared a cumulative DPU of INR 30.8 per unit, reinforcing its commitment to consistent unitholder returns. Management anticipates that projects will sustain a cash yield of 10-12% going forward, ensuring predictable distributions.

    05

    Debt Structure and Cost Optimization Strategy

    The current average cost of debt stands at 7.6%, with the valuer's NAV calculation based on 7.68%. The company plans to secure additional debt for upcoming acquisitions at a lower target cost of 7.1-7.2%. While all current debt is in NCDs, future borrowings will transition towards repo-linked term loans to establish a natural hedge against interest rate fluctuations. A significant NCD series is due for renewal in March 2026, which the company intends to refinance at optimized rates, leveraging an existing reset clause.

    06

    Favorable Industry Dynamics and Future Opportunities

    Despite a recent slowdown in NHAI project awards over the last 12 months, management remains optimistic, expecting activity to rebound in H2 FY26. The road sector continues to exhibit strong momentum, with the Hybrid Annuity Model (HAM) remaining the preferred model for project awards. Sustained budgetary allocation from the government for the sector further strengthens the long-term outlook, creating a robust pipeline of opportunities for InvITs like Capital Infra Trust.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.