IRB Infrastructure Developers has set a national precedent
by executing the country’s first listing of a
national infrastructure investment trust (InvIT) fund. But
issues over the classification of such a trust as debt or
equity have complicated the deal.
After more than two years of preparation, IRB's InvIT Fund
successfully raised $782 million though its initial public
offering (IPO), which was 8.75 times oversubscribed. This
closed on May 5. Another InvIT IPO, that of India Grid, kicked
off on May 17.
But counsel involved in the IRB deal point to inconsistency
among relevant regulators in their respective definition of a
trust. While the Securities and Exchange Board of India (Sebi)
said it should be treated as equity, other regulators
controlling individual entities, corporates, insurance
companies and pension funds could argue otherwise.
"They had to come to a consensus because the classification
categorises the exposure these companies can take...