Crisil Limited · NSE:CRISIL

Crisil — Investor Presentation (October 2020)

35 slides from Crisil's investor presentation, October 2020

Slide 2: CRISIL Ratings ViewCube on InvITs and REITs
CRISIL Ratings ViewCube on InvITs and REITs ViewCube is a compilation of sector views expressed during CRISIL Ratings’ webinars. These include CRISIL Ratings’ own views, those of stakeholders, and those emanating from a poll conducted during the webinar. © 2020 CRISIL Ltd. All rights reserved. Analy
Slide 5: Key messages
Key messages  A proven avenue globally, InvITs and REITs* are gaining acceptability in India after initial hiccups  These trusts have attracted ~Rs 2 lakh crore^ of capital so far  InvITs and REITs are superior structures due to tax concessions and other enabling regulations  Attract high-qualit
Slide 7: What are InvITs and REITs?
What are InvITs and REITs? Indicative structure of InvITs and REITs Sponsor Unitholders Project developer that floats the InvIT/ Own InvIT units and earn income in the REIT, holds at least 15% stake form of dividend /interest/ return of capital with a three-year lock-in © 2020 CRISIL Ltd. All rights
Slide 8: Key features of InvITs/REITs
Key features of InvITs and REITs Like mutual funds, InvITs and Units of InvITs and REITs REITs pool money from investors can be listed on stock and put it into real estate or exchanges and traded infrastructure assets © 2020 CRISIL Ltd. All rights reserved. 90% of the net distributable cash flow has
Slide 9: Why did InvITs and REITs come into existence?
Why did InvITs and REITs come into existence? Year 0-4 Year 5-20 Project Stabilisation Mature and operational phase phase phase © 2020 CRISIL Ltd. All rights reserved. High credit quality Banks, too, can look for Amenable to InvITs and an exit to unlock funds The cycle of asset REITs (high-quality
Slide 10: Tax pass-through makes InvITs/REITs an attractive investment vehicle
Tax pass-through makes InvITs/REITs an attractive investment vehicle Conventional structure InvIT/REIT Shareholders have to pay tax on Shareholders dividend, whereas it is exempted for Unitholders unitholders if SPVs are paying tax as Dividend + interest per the old tax regime + return of capital In
Slide 11: InvITs and REITs: a win-win for all stakeholders and the economy
InvITs and REITs a win-win for all stakeholders and the economy Developers Macro-economy Facilitation of easy entry and exit for investors Unlock capital for future Invest in assets without Free up banking capital, growth owning them – retail thus promoting a virtuous investors © 2020 CRISIL Ltd. Al
Slide 13: Globally accepted investment vehicle with a long track record
Globally accepted investment vehicle with a long track record InvIT/ REIT structure differs across countries because of differences in governance, legislation and demographics United USA Singapore Japan Hong Kong India © 2020 CRISIL Ltd. All rights reserved. Kingdom Year of introduction 1960 2001 20
Slide 14: Evolution of InvITs and REITs in India
Evolution of InvITs and REITs in India The path so far Assets under management (AUM) (Rs ’000 crore) InvITs REITs 67 © 2020 CRISIL Ltd. All rights reserved. 33 120 32 77 13 31 FY15 FY18 FY19 FY20 YTD FY21* FY15 FY17 & FY18 FY20 FY21 SEBI notified • Minimum sponsor • Leverage limit for • Induction of
Slide 15: Private unlisted InvITs to improve access to private pool of capital
Private unlisted InvITs to improve access to private pool of capital Public InvIT Private listed InvIT Private unlisted InvIT Investors Retail as well as institutional investors Institutional investors Institutional investors Minimum asset value Rs 500 crore Rs 500 crore Rs 500 crore Rs 250-400 cror
Slide 17: Low leverage and diversified asset portfolio improve credit profile
Low leverage and diversified asset portfolio improve credit profile Conventional infra asset Improvement in financial risk profile Sponsor Lender 100% 90% 80% Typical debt/AUM of a E: 30% D:70% standalone infra asset © 2020 CRISIL Ltd. All rights reserved. 70% Project SPV 60% Debt/AUM Trust 2 Asset
Slide 18: Most InvITs and REITs in India are rated AAA/AA+
Most InvITs and REITs in India are rated AAA/AA+ AUM Name of InvIT/REIT Sponsor Asset class Structure CRISIL Ratings ** (Rs crore)* IRB InvIT Fund IRB Roads Public listed InvIT 6,500 - India Grid Trust KKR Power transmission Public listed InvIT 14,000 CRISIL AAA/Stable Provisional CRISIL AAA/Rating
Slide 19: Credit profile of InvITs and REITs to move across the risk spectrum
Credit profile of InvITs and REITs to move across the risk spectrum Varied degree of Earnings Counterparty Operating Regulatory Ratings distribution of InvITs and risks  risk risk risk risk REITs in the US Toll roads^ 12% 11% Power transmission* © 2020 CRISIL Ltd. All rights reserved. Commercial re
Slide 21: InvITs and REITs can be partners in India's infrastructure growth
InvITs and REITs can be partners in India’s infrastructure growth Expected infra funding requirement Attractive routes for infrastructure financing FY20 - FY25P Roads Existing asset Rs 111 lakh crore New asset classes classes Energy Toll/ annuity roads HAM* roads © 2020 CRISIL Ltd. All rights reserv
Slide 22: Potential of ~Rs 8 lakh crore over the next 4-6 years
Potential of ~Rs 8 lakh crore over the next 4-6 years Analysis of existing and new asset classes Potential of ~Rs 8 lakh crore in next 4- 6 years Toll roads ~Rs 10 lakh Valuation Power transmission crore Annual methodology Commercial real estate Operational revenue Gas pipeline capacities and other
Slide 23: Challenges and road ahead
Challenges and road ahead  Deeper understanding will attract more investors to this investment vehicle ‒ Stakeholders should continue efforts to increase awareness of this investment vehicle ‒ Investor awareness of nuances is critical - for e.g., real estate assets have low cash yield, high upside
Slide 24: Key takeaways
Key takeaways Government is betting big on infrastructure to accelerate the country’s pace of growth, with plans to spend over Rs 100 lakh crore on infrastructure creation between fiscals 2020 and 2025 © 2020 CRISIL Ltd. All rights reserved. InvITs and REITs can be alternate funding options, which c
Slide 26: Eminent panellists
Eminent panellists © 2020 CRISIL Ltd. All rights reserved. Sridhar Rengan Harsh Shah Vinod Rohira MD - Finance CEO & Whole-Time Director MD & CEO - Commercial Real Estate & REIT Brookfield Asset Management India Grid Trust K Raheja Corp Kavita Saha Vikas Agarwal Senior Principal - Infrastructure Hea
Slide 27: Excerpts from the panel discussion (1/4)
Excerpts from the panel discussion during the webinar (1/4) On the journey so far and growth possibilities On innovations to propel InvITs and REITs  The InvITs and REITS journey so far has had three phases:  Promote retail investor participation through: ‒ Between fiscals 2014 and 2017, when regu
Slide 28: Excerpts from the panel discussion (2/4)
Excerpts from the panel discussion during the webinar (2/4) On benefits vis-à-vis conventional infra assets On growth potential of private unlisted InvITs  The foremost advantage is tax savings, followed by the ability to  The biggest advantage of investing in InvITs so far has been the cap pool a
Slide 29: Excerpts from the panel discussion (3/4)
Excerpts from the panel discussion during the webinar (3/4) Lenders’ perspective on InvITs and REITs On leverage cap for REITs  These vehicles pare construction risk and offer cash flow diversity,  While the debt cap is 49%, it is prudent for REITs to stay in the 25- giving lenders more comfort th
Slide 30: Excerpts from the panel discussion (4/4)
Excerpts from the panel discussion during the webinar (4/4) On the appetite for new sectors On whether work from home is challenge  The nature of underlying assets, especially with respect to stability  Work from home (WFH) is unlikely to pose a challenge as a majority in cash flows, will determin
Slide 32: Results of a survey conducted during webinar (1/2)
Results of a survey conducted during webinar* (1/2) Q1. As a retail investor, what would be Q2. What aspect could most impactfully Q3. Could introduction of private your return (distribution + capital increase retail investor participation in unlisted InvITs boost investment by appreciation) expecta
Slide 33: Results of a survey conducted during webinar (2/2)
Results of a survey conducted during webinar* (2/2) Q4. Should private Q5. Which asset class could Q6. What is the potential of Q7. What could be the most unlisted REITs be allowed be best suited for InvITs and InvITs and REITs in next 4-6 prominent risk for a retail to expand the market? REITs in t
Slide 35: About CRISIL Ltd
About CRISIL Ltd CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets function better. It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global foo

CRISIL — Investor Presentation (October 2020) on 6ix

Crisil — Investor Presentation (October 2020)

Slide 1: Rising pillars of infra financing

Slide 2: CRISIL Ratings ViewCube on InvITs and REITs

Slide 3: Contents

Slide 4: Our view

Slide 5: Key messages

Slide 6: Demystifying InvITs and REITs

Slide 7: What are InvITs and REITs?

Slide 8: Key features of InvITs/REITs

Slide 9: Why did InvITs and REITs come into existence?

Slide 10: Tax pass-through makes InvITs/REITs an attractive investment vehicle

Slide 11: InvITs and REITs: a win-win for all stakeholders and the economy

Slide 12: Global presence and evolution in India

Slide 13: Globally accepted investment vehicle with a long track record

Slide 14: Evolution of InvITs and REITs in India

Slide 15: Private unlisted InvITs to improve access to private pool of capital

Slide 16: Credit profile of InvITs and REITs

Slide 17: Low leverage and diversified asset portfolio improve credit profile

Slide 18: Most InvITs and REITs in India are rated AAA/AA+

Slide 19: Credit profile of InvITs and REITs to move across the risk spectrum

Slide 20: Potential in India

Slide 21: InvITs and REITs can be partners in India's infrastructure growth

Slide 22: Potential of ~Rs 8 lakh crore over the next 4-6 years

Slide 23: Challenges and road ahead

Slide 24: Key takeaways

Slide 25: Their view

Slide 26: Eminent panellists

Slide 27: Excerpts from the panel discussion (1/4)

Slide 28: Excerpts from the panel discussion (2/4)

Slide 29: Excerpts from the panel discussion (3/4)

Slide 30: Excerpts from the panel discussion (4/4)

Slide 31: Poll view

Slide 32: Results of a survey conducted during webinar (1/2)

Slide 33: Results of a survey conducted during webinar (2/2)

Slide 34: Thank you

Slide 35: About CRISIL Ltd