Infrastructure companies planning to mop up funds through Infrastructure Investment Trusts (InvITs)

IRB Infrastructure Developers is planning to raise ₹5,000-6,000 crore, expected to file the DRHP within a month. IRB intends to use the proceeds mainly to fund new road projects it intends to bid for and also for existing ones. The company would also be bringing its six NHAI toll road projects, valued at ₹7,000-8,000 crore, into the trust. The company has mandated Deutsche Bank, Credit Suisse and IDFC Bank as merchant bankers for InvITs, sources close to the development told BusinessLine.

Other players are in the queue

Companies such as Adani Group, GMR Infrastructure, IL&FS Transportation Networks and L&T are also understood to be looking at InvITs to raise funds. Sterlite Power Transmission, a company that was demerged from Sterlite Technologies, is also planning to file the DRHP for InvITs by September. SPTL had filed an application for InvITs with SEBI in June. According to the sources, it was planning to raise ₹2,500-3,000 crore.

About InvIT

IRB fund raising could be the first fund-raising through an InvIT after it was first proposed in the Union Budget in 2014. In this year’s Budget speech, Finance Minister had proposed that any distribution made out of income of a SPV to InvITs having specified shareholding will not be subjected to dividend distribution tax, giving a much-needed fillip to the trust.

InvITs, much like mutual funds, enable individuals to pool investments into the infrastructure sector and earn a return on the income (after deducting expenditure). InvITs can invest in infrastructure projects, either directly or through SPVs, while in case of public-private partnership projects, such investments can be made only through SPVs.In India, InvITs are regulated by SEBI and are mandated to be listed.

Source: http://buff.ly/2b5YU1r

Deutsche Bank chief scotches India unit sale speculation

MUMBAI: Deutsche Bank quelled speculation about its future in India as well as Asia and said it aims to build on one of the most profitable franchises amid global reorganisation that is leading to some businesses shrinking for it to remain profitable.

"Deutsche Bank India sale was never ever on the table,''Gunit Chadha, chief executive officer of Deutsche Bank in Asia Pacific, told ET in an interview. "We have significant businesses in Japan, China, India, Australia, Hong Kong,ASEAN & Singapore.

Deutsche Bank

The global banking industry must reinvent its business models. We ourselves have some challenges which we are proactively addressing, but our commitment to Asia Pacific is strong and stays fully intact."

The German bank which was cleared by the regulators in a rate rigging probe is reorganising itself by cutting staff and exiting markets which are unviable.In this context, some speculated that Deutsche may sell its India unit as the region itself could become a non-core area. In fact, the bank had to face some toughmarket conditions recently after analysts questioned its ability to pay interest on some bonds. But the bank has since reassured investors with a bond buyback plan. Its CEO John Cryan said that bank is 'absolutely rock solid.'

"Asia Pacific is our strong growth region," said Chadha. "This is no surprise as Deutsche Bank Asia Pacific PBT has doubled between 2012 to 2015 with very attractive financial metrics and the region now has five of the top 10 countries for Deutsche Bank globally." About 12% of its revenues (4 billion) came from the Asia-Pacific region. It mostly does corporate and investment banking in the region with India alone having a retail business. Deutsche Bank has 17 branches in India currently with around.`5,000 crore mortgage book and.`15,000 crore in wealth management.

Last year it sold its mutual fund business to Pramerica Mutual Fund.

In October 2015, the bank announced that it will shut operations in 10 countries globally, cutting 15,000 full and part time jobs as part of the bank's 'Strategy 2020' which aims to reduce costs, lower risks and improve Deutsche Bank's capital position after being weighed down by fines linked to the LIBOR fixing scandal.

Chadha said the bank recently sold its mutual fund business in India because it was "sub scale and largely domestic". It was less than 2-3% of the DB India profits. While being consistently profitable and well managed, it needed to scale up.

But the same need not be true of its retail business in India even though it does not contribute significantly to overall profits.

"I don't believe that our Indian retail business will be shrunk to glory," said Chadha. "Either you are in the retail business or not. If one is in the business it needs to scale up. Deutsche Bank's retail business is not about becoming leaner. It's a well-managed profitable business for us. Yet as India is the only market in Asia where we have a retail business , the strategic forward naturally comes up."

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