IPOs a first for infrastructure investment trusts

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J Sagar Associates (JSA) was legal counsel to IRB InvIT Fund in its recent US$785 million IPO, on the Bombay Stock Exchange and the National Stock Exchange of India. Investment trusts specifically for the infrastructure sector (InvITs) were introduced to India in 2014 and this was the first IPO by an InvIT.

JSA’s team comprised joint managing partner Dina Wadia, partner Arka Mookerjee, principal associate Shaswata Dutta, senior associate Swapneil Akut, and associates Viraj Bathe, Harshad Vaswani and Stuti Shah. Wadia told India Business Law Journal that JSA has advised the fund’s sponsor, road developer IRB Infrastructure Developers, right from the setting up of the InvIT.

“The regulations were evolving during the course of the transaction”, said Wadia. The lawyers on the deal had to “constantly brainstorm” as certain settled principles could not be applied directly to this product. “Other regulators also needed to amend certain legislations to ensure that the product does not get stuck due to regulatory issues. As a matter of fact, the amendment to the deposit regulations came just before the offer opened.”

S&R Associates and Clifford Chance were Indian and international legal counsel respectively to the underwriters. Singapore-based partner Rahul Guptan led the Clifford Chance team, supported by partners Johannes Juette and Owen Lysak, and senior associate Shashwat Tewary.

Cyril Amarchand Mangaldas (CAM), S&R Associates and Latham & Watkins advised on a second IPO by an InvIT – the US$158 IPO by IndiGrid InvIT. CAM was legal counsel to IndiGrid and its sponsor, Sterlite Power Grid Ventures. The firm’s team was led by Mumbai-based capital markets partners Yash Ashar and Kranti Mohan.

Ashar told India Business Law Journal that InvITs had “filled a significant gap” in infrastructure financing and that previously infrastructure developers in India had considered listing such instruments in overseas jurisdictions, but it had “raised many complexities”.

Mohan added that the “important factors to consider for InvITs are the quality of assets (certainty of operating revenues and cash flows), the residual life of assets, the depth of the pipeline for ROFO [right of first offer] assets, the credentials of the sponsor and a robust corporate governance framework governing the investment manager”.

S&R Associates and Latham & Watkins were Indian and international legal counsel respectively to the underwriters. The Latham & Watkins team was led by Singapore-based partner Rajiv Gupta.