There’s also the case of Deferred Premiums to NHAI which is putting downward pressure on share price.
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IRB Tumkur Chitradurga Tollway (IRBTC) was supposed to pay a fixed annual premium to the National Highways Authority of India (NHAI) with an increase every year.
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Due to lower toll collections in the initial years, NHAI allowed IRBTC to defer the premium payment from FY 2014-15 to FY 2024-25.
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Repayment of deferred premium:
- The deferred amount will be treated as a loan and needs to be repaid with interest at 2% above the RBI bank rate.
- Currently, the outstanding deferred premium with interest is around ₹538 crore (or a little more).
- IRB InvIT will repay the dues when they have enough surplus cash.
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Impact:
- Deferring the premium helped IRB InvIT improve its cash flow in the initial years and distribute higher payouts to unitholders.
- However, this is a liability that needs to be settled eventually, and it can put a strain on future cash flows.
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