On the occasion of Interise Trust receiving certifications for six ISO standards from the International Organisation for Standardisation (ISO), Mr. Pawan Kant, Chief Executive Officer, Interise Investment Managers Limited, shares his remarks and experience. Excerpts…
Overview
Interise Trust (formerly IndInfravit Trust) is one of India’s largest Infrastructure Investment Trusts (InvITs) in the roads sector and was among the first to list on the NSE and BSE in 2018 via private placement.
Founded in 2018, with an initial portfolio of five road projects, the trust has grown significantly since then and currently manages a diverse portfolio of 17 build-operate-transfer (BOT) and annuity road projects across eight states. Collectively, these assets span around 7,300 lane km of highways, with an enterprise value of approximately Rs 200 billion.
Our network supports 450,000 passenger car units daily, reflecting our commitment to creating value and driving community growth. As a pioneer of the self-sponsored InvIT model in India, Interise has set a precedent for the industry, signalling a transformative shift towards independent and professionally managed InvITs.
Interise is currently focused on the roads sector and aims to leverage upcoming opportunities within this space, with plans to gradually expand to other sectors.
Interise has partnered with Quality Austria Central Asia (QACA) to implement ISO standard processes across all our projects and offices, collectively strengthening our asset management and delivery systems. An industry first – Six ISO certifications
The companies and the functions of the Trust adopt consistent processes that are ISO certified:
- ISO 9001: 2015 Quality Management System
- ISO 14001: 2015 Environment Management System
- ISO 39001: 2012 Road Traffic Safety Management System
- ISO 45001:2018 Occupational Health and Safety Management System
- ISO 31000: 2018 Risk Management Guidelines
- ISO 27001: 2022 Information Security and Management System
Interise Trust is now the first in the sector to achieve compliance with international standards in quality, environment, health and safety, information security, road traffic safety, and risk management across all our 17 special purpose vehicles (SPVs) and 2 offices. With ISO processes and systems being implemented across our projects and offices, SAP is utilised to provide real-time financial information on the assets.
The Trust is committed to holding quality assets until the concession period, unlike the sector trend of exiting the business within three to four years. Further, it has established a robust asset management framework, ensuring systematic management aligned with concession agreements and global best practices.
Strategic initiatives to address environmental challenges
A significant initiative was implemented at our road projects in Rajasthan, where the temperature increase over the past decade has significantly damaged roads. Initially, VG 30 / VG 40 bitumen was employed to address this issue. However, this did not guarantee the long-term viability of roads. Consequently, the need for innovative technologies became more apparent. To address this, Interise collaborated with IIT Chennai and IIT Mumbai for bringing in new cutting-edge technologies. Alternative materials like polymer modified bitumen were used. This process of experimentation has been crucial for analysing effective strategies to address environmental challenges.
Prioritising the adoption of global technology is crucial to elevate Indian safety standards. With a collaborative model that facilitates technology transfer, India can significantly enhance its infrastructure capabilities.
Our ESG mission is to be a leading player in the infrastructure space meeting and exceeding standards for quality, sustainability, governance and ethics. To promote sustainability and environmental consciousness, the projects are utilising alternative energy sources like solar panels and energy efficient LEDs in addition to adopting water conservation methods like rain water harvesting, surface run-off harvesting and drip irrigation techniques.
Financial and operational sustainability
The fundamental principle of InvITs is to ensure that the underlying assets generate consistent income. The success of a trust is measured by its ability to acquire, maintain and ensure the functionality of assets throughout the concession period. Financial and operational sustainability are critical tenets. InvITs require proper asset maintenance and a regular acquisition strategy to remain viable long-term investments. The growth trajectory is fundamentally linked to the regular acquisition of assets to replace those nearing the end of their concession periods, especially in sectors like roads and transmission lines, where this period can be over 20 years long.
Over the years, the market regulator SEBI has been very proactive with respect to industry recommendations. However, domestic institutions need to be encouraged to increase their investment stakes in InvITs. Currently, insurance companies are limited to a 3 per cent cap on their investments in India, indicating potential for expansion. A substantial pool of funds within the country could be co-invested in large InvITs. External commercial borrowings should also be promoted within this space.
Interise was recently recognised for developing an innovative financial structure in which Interise Trust and Barclays Bank PLC jointly won the asset Triple ‘A’ Treasurise Award for best solution in the financial institution /non- bank financial institution Space for 2024. The award is a testimony to the bespoke and innovative financial structuring solutions which was jointly arrived at by the teams from both the organisations.