I don’t assume so – I see substantial deprecation accounted for alternative of belongings??
Anand_Radhakrishnan:
I see substantial deprecation accounted for alternative of belongings??
Depreciation as an accounting entry? YesIs money retained on books which can be utilized in future? No
1 Like
PGINVIT is falling continues – I believe it is going to contact 80 rupees
no sense of dividend and inventory falling Daily
1 Like
Properly, it’s a freely traded asset. The market worth doesn’t at all times replicate the underlying worth. Maybe somebody needed to dump a bunch of shares which resulted within the worth drastically crashing. I additionally seen that a few of them had been buying and selling above market worth which maybe received corrected with the latest crash.
1 Like
Throughout 30 yr lease of both transmission traces or street traces for toll assortment by corresponding invits, gained’t they maintain including extra belongings to the record such that these invits run for extra years?Suppose they get extra sources after 10 years which final for 30 years from then, will probably be 40 years for us from now. Is that this not the best way invits in another nations just like the US work which began way back? On this case, so long as we’re getting revenue share, why fear in regards to the depreciation of present belongings? If new asset additions happen much more slowly, neglect about capital appreciation. Nonetheless, the revenue distribution can proceed for us and our future generations assuming these invits run for not less than 50+ or typically 100+ years.Undecided if Tesla’s wi-fi energy distribution, air taxis, and flying vehicles arrive sooner or later as 50 years is just too lengthy for a quick technologically advancing part of science. In fact, the Tesla wi-fi energy distribution know-how got here way back however received suppressed by elite individuals to keep away from collapse and losses of their companies.
Not simply InvIT however ReITs aren’t doing properly both.
rameshp:
gained’t they maintain including extra belongings to the record such that these invits run for extra years?
Theoretically sure. However there’s a restrict to it and it depends upon the place will the cash come for getting new belongings?Undecided what USA does, however presently INVIT (and even REIT) usually are not allowed to retain any incomes on their e-book. They’re mandatorily required to payout 90% of their cashflow to investor yearly.
Since they don’t retain cash, they don’t have more cash to purchase new belongings in future. They’ll elevate cash to purchase new belongings by issuing extra models, however that dilute current traders and it expands per unit incomes solely barely
OR they take extra debt (there’s a restrict on how a lot debt they’ll take) however that too has limits.
Indigrid has been shopping for new belongings utilizing mixture of each.
rameshp:
Nonetheless, the revenue distribution can proceed for us and our future generations assuming these invits run for not less than 50+ or typically 100+ years.
An INVIT can run for 100 years, however that doesn’t imply authentic investor who invested at begining continues to be incomes return Likelihood is he’s already paid again or received extremely diluted and new set of traders have are available in (or current investor has reinvested)
So on the stage of SPVs, particular person SPVs can not retain any money? And for them too Depreciation might be simply accounting entry? The 90% restrict is relevant at SPV stage too? or simply at InvIT stage?
Additionally, didn’t get this half? The Unitholder continues to carry fractional possession (perhaps diluted) until the InvIT continues to personal Property Proper? Or as soon as the Capital is paid the possession ceases to exist?
Akash_Shah:
Likelihood is he’s already paid again
CrownedEagle:
The 90% restrict is relevant at SPV stage too? or simply at InvIT stage?
At each stage
CrownedEagle:
The Unitholder continues to carry fractional possession (perhaps diluted) until the InvIT continues to personal Property Proper?
Sure, possession doesn’t stop but it surely turns into so tiny that after some extent it’s inconsequential.
Let me clarify it in a barely higher approach. Assuming INVIT has an asset with lifetime of 30 years. For those who put in rs. 100 at begin your money circulation will carry on decreasing over the life as follows, assuming no new asset is purchased over (Simply an instance … not precise numbers)
12 months
1
5
10
20
25
30
31
yearly Money circulation (rs.)
10
9
7
5
3
1
0
Now, if INVIT continues to boost extra cash and carry on shopping for extra belongings, your possession continues for prolonged time frame, however since youa re a lot diluted, your returns could be inconsequential. One thing like follows
12 months
1
5
10
20
25
30
31
35
40
50
yearly Money circulation (rs.)
10
9
8
6
4
2
1
0.5
0.3
0.2
Once more these numbers are simply an instance to point out the drop, and never precise numbers (that may depend upon lot of things together with what asset, how it’s purchased, how a lot dilution and so on.)
The purpose I’m attempting to convey is that you simply paid cash in the beginning to purchase an asset and you’ll get returns in type of cashflow generated from that asset. As soon as that asset is completed with it, kind of your returns are additionally executed.INVIT can carry on shopping for new asset with new cash and delay its personal life, however that doesn’t meaningfully improve authentic traders return past some extent.
Additionally, one clarification – this can be a idea and that is how INVIT will behave in long run. Capital appreciation in brief time period is totally different and that may occur resulting from drop in rates of interest or some market euphoria due to “information” that INVIT is shopping for new asset.
2 Likes
Thanks for Reply @Akash_Shah
Akash_Shah:
For those who put in rs. 100 at begin your money circulation will carry on decreasing over the life as follows, assuming no new asset is purchased over
Akash_Shah:
Now, if INVIT continues to boost extra cash and carry on shopping for extra belongings, your possession continues for prolonged time frame, however since youa re a lot diluted, your returns could be inconsequential. One thing like follows
12 months
1
5
10
20
25
30
31
35
40
50yearly Money circulation (rs.)
10
9
8
6
4
2
1
0.5
0.3
This discount you’re talking of is because of elevating of latest fairness, proper?
However how drastic is the drop in FCFF over say 28-30 years in case of no new asset is purchased?
And the way correct (or Reliable) are their projections of Future Money Flows? Contemplating the TSAs are long run and a lot of the TS prices are mounted or based mostly on a predetermined components (I’m not contemplating the distinctive restore prices that may happen in case pure catastrophe or distinctive litigation prices).
For instance, in case of PGInvIT the discount FCFF (Administration’s Projection) drops by ~33% over interval of 28 years from ~172.663Cr to 119.141Cr. In case of different SPVs the is round 50%.
OR is that this simply their Excel Sheet Wizardry?
CrownedEagle:
This discount you’re talking of is because of elevating of latest fairness, proper?
No I used to be attempting to imitate the discount in Free Cashflow of tasks, decreasing the distributable quantity.
CrownedEagle:
However how drastic is the drop in FCFF over say 28-30 years in case of no new asset is purchased?
Utterly depends upon Asset and what Sort of contract it has. Every SPV contract could be distinctive and have variations concerned in fee time period.Eg. for Grid asset, cashflows are excessive at starting and tapers down close to finish.For street asset, it’s low at starting and will increase in the direction of finish (as toll and visitors each will increase over interval)
CrownedEagle:
And the way correct (or Reliable) are their projections of Future Money Flows? Contemplating the TSAs are long run and a lot of the TS prices are mounted or based mostly on a predetermined components (I’m not contemplating the distinctive restore prices that may happen in case pure catastrophe or distinctive litigation prices).
For grid asset, I’d agree with what you stated, these projections are usually dependable, until some distinctive circumstances come up.For Highway belongings, I’d by no means belief these projections. Govt has a behavior of over projecting visitors information.
1 Like
Akash_Shah:
No I used to be attempting to imitate the discount in Free Cashflow of tasks, decreasing the distributable quantity.
You meant the Money with InvIT put up quarterly payout? You had been utilizing this (Money put up Payout) as a proxy for % possession?