January is usually a bleak month for dividend payouts; Q3 ends in Dec and the subsequent month is usually spent by the companies compiling the financial data. But this time, the new year began with a pleasant surprise 🎊.
As mentioned in a prior post GMDC declared their annual dividend late in 2020 GMDC: Dividend declared💰 and after the AGM in Dec, the payout was made in Jan 2021🎊
Next came the payout from IRB InvIT; this was totally unexpected as during last year, the Q3 payout was declared and made only in the month of Feb. (Declared 3rd Distribution of Rs. 2.70/- per unit, for the financial year 2019-20). This year it was made in Jan – Declared 3rd Distribution of Rs. 2.50/- per unit, for the financial year 2020-21🎊
IRB InvIT’s [CMP is Rs. 49.57/- as on 12 Feb, NSE] portfolio of toll roads consists of “seven operational road assets with four of them forming a part of the Golden Quadrilateral (GQ) project and one being part of the East-West corridor. These projects span the states of Maharashtra, Gujarat, Rajasthan, Karnataka, Tamil Nadu and Punjab, with an average weighted residual concession period of 16 years “👉InvITs: Investing for an additional source of income💰(IRB InvIT🛣)
For the current year 2020-21 their distribution till date totalling to Rs. 6/- per unit has been as follows:
 Rs. 1.50/- per unit for Q1
 Rs. 2/- per unit for Q2
 Rs. 2.50/- per unit for Q3 and one more quarter to go.
This year had many challenges beginning with the lockdown due to COVID 19 in Q1, which brought the economy and particularly the road traffic to a stand still. IRB InvIT collects the tolls from it’s highway projects and pays the same to the unit holders. So it is good to see that the payouts did not cease even in a very bad quarter like Q1 and instead saw a slow rise q-o-q.
Moving on, with the economy and businesses still on the recovery from the pandemic, “strong surge in the toll collections for Q3 FY21 was primarily driven by an increase in the passenger traffic and remarkable uptick in the commercial traffic”, says the company
The other factors that have proved beneficial include the current regime of low interest rates on debt and also making FASTag mandatory for all vehicles by the government which digitises the toll collection, reducing slippage and possibly the manpower costs.
“However due to the ongoing farmers’ protest in the capital, the tolling on the Amritsar- Pathankot project has been affected and halted since October beginning”, announced the company. For this they have sought compensation under force majeure clause of the concession agreement with the National Highways Authority of India (NHAI) “where we expect 50% of the O&M and interest cost to be reimbursed in cash and an extension in the concession agreement to compensate for the revenue loss during the toll suspension period”, informs the company. “Toll collection from the Pathankot and Amritsar Toll Road Limited project contributes – 6% to 7 % of the Gross Toll collection”, company reports.
In other good news, the other infrastructure fund, IndiGrid InvIT has declared a distribution of Rs. 3.10/- per unit (in the form of Interest) for Q3FY21 in Jan and the payout will be in Feb.
Charlie Munger once said “I do not intend to get rich. I just want to get independent.” Cash is the oxygen of independence – from the book The Psychology of Money by Morgan Housel 👉Money is always found on an outlier’s tail 🧐
And so we strive !!
Till next post, take care !!