New Delhi, June 16 -- On May 6, Interise Trust-an infrastructure investment trust (InvIT) jointly controlled by two Canadian pension funds-handed back a four-lane road constructed on the build-operate-transfer model in Maharashtra to the National Highways Authority of India (NHAI) after its toll concession period ended. In August, the InvIT will transfer one more. That will bring the number of highways it would have transferred since 2022 to four.
The transfers wouldn't be concerning, but for the fact the InvIT hasn't added any assets to its portfolio since 2022 when it bought five operational road projects from Canadian investment firm Brookfield in a $1.2-billion deal. That deal increased its portfolio to 18 roads, up from just five when it privately listed its units on stock exchanges in 2018. Following the recent handbacks, its portfolio has shrunk to 15 assets. By August, that number will fall to 14.
Does the InvIT plan to add any assets anytime soon? There is no publicly disclosed pipeline for imminent additions. Interise executives did not respond to a detailed questionnaire for this article.
So, where does the InvIT go from here? A detailed look at its recent performance and the activity of its two main unitholders may offer some clues. But first, let's take a quick look at the asset handovers.
Four handbacks, zero acquisitions
Interise transferred Vadodara Bharuch Tollway back to the NHAI in March 2022. Mysore Bellary Highway Pvt LTd completed its state concession in December 2024. Igatpuri Highway Pvt Ltd, a 99.5-km four-lane toll road project in Maharashtra, was handed over to the NHAI on May 6. Western Andhra Tollways Pvt Ltd, which operates a 55.7-km four-lane highway in Telangana, is set to conclude its concession period on August 19.
An independent valuation report filed on April 27, 2026, valued the remaining assets at approximately Rs 19,634 crore as of March 31, 2026, covering 7,107 lane-kilometers across eight states. That valuation and lane mile footprint will contract when the Western Andhra segment is formally deducted from the books.
Other legacy assets from the original seed portfolio are rapidly entering similar terminal territory. Most notably, the Krishnagiri Thopur Toll Road on NH-44 in Tamil Nadu, which started commercial operations in February 2009 on a 20-year concession, is scheduled to fully elapse by 2029 on unadjusted terms.
The disputes and structural pressures
Several concession-period risks continue to hang over the portfolio. According to a recent report by the credit ratings firm ICRA Ltd, for Dhule Palesner Tollway in Maharashtra and Devihalli Hassan Tollway in Karnataka, the concessioning authorities previously recommended reductions in the concession timelines, arguing that actual traffic outpaced original targets and project costs were recovered ahead of schedule. Interise has pushed back via arbitration to contest the underlying math.
Interise is also contesting engineer evaluations recommending lower concession extensions for Krishnagiri Walajahpet Tollway and Beawar Pali Pindwara Tollway, according to ICRA.
While Interise secured some relief in FY26 with the extension of concession periods for five assets due to historic traffic trailing original targets, the outstanding arbitrations remain uncertain. If it wins these battles, the concession clocks hold. If it loses, assets already in their twilight years could see their lifespans cut even shorter.
Beyond legal battles, physical competition is mounting. The trust is facing traffic diversion on multiple routes due to major newly opened or progressing corridors. Already, the Samruddhi Expressway in Maharashtra has led to suppressed traffic on the Chhatrapati Sambhaji Nagar-Jalna Tollway for three consecutive years.
Compounding these pressures, three SPVs-Beawar Pali Pindwara, Hyderabad-Yadgiri, and Shreenathji-Udaipur-are locked into sizable premium payment schedules to the NHAI over their remaining terms, meaning cash outflows will escalate precisely as revenue from expiring assets drops away.
Financial performance
Interise's underlying financials are, on their own terms, impressive. Reflecting a seasoned operational run, toll collections grew a healthy 10.2% in FY26 to Rs 3,609 crore, from Rs 3,275 crore in FY25, according to its latest financial statement. Earnings before depreciation, interest, and taxes (EBITDA) margins expanded to 70% from 65% in FY24 and 61% in FY23.
The balance sheet, too, looks well-managed. A refinancing program executed in early 2026 locked in long-term debt, including Rs 2,075 crore of senior secured non-convertible debentures (NCDs) carrying highly favorable coupons of 6.96% and 7.30%. Backed by a healthy cash and bank buffer of approximately Rs 1,300 crore as of March 31, 2026, Interise enjoys some of the lowest borrowing costs in the Indian infrastructure space-a credit metric that has repeatedly earned it AAA ratings from credit rating firms.
But these metrics describe a portfolio in the second half of its life. The margin expansion is an artifact of a mature portfolio that has already cleared its heavy construction cycles and is now running primarily on routine maintenance spend. The same maturity that makes those peak margins possible is also what makes each concession expiry irreversible.
Who owns Interise
Understanding Interise's acquisition pause requires looking closely at who controls the cap table.
Interise was initially known as IndInfravit Trust, which was set up by L&T Infrastructure Development Projects Ltd in 2018. The same year, Canada Pension Plan Investment Board (CPPIB) and Germany's Allianz invested in the InvIT. The following year, the Ontario Municipal Employees Retirement System (OMERS) joined its cap table. OMERS increased its stake when Allianz exited in 2024.
CPPIB, which manages Canada's largest pension fund, now owns a 60.8% stake while OMERS holds 34.8%, according to its unitholding data. Together, these two Canadian pension funds control over 95.6% of the trust's total outstanding units.
For CPPIB and OMERS, a highly mature, cash-generative toll road portfolio that steadily pays down its debt and distributes free cash might be executing its role perfectly. From their unique vantage point, letting an asset base wind down naturally while extracting optimized cash distributions isn't a failure-it's a feature.
However, this leaves minority public unitholders with a severe liquidity bottleneck. Because the two Canadian pension funds lock up nearly 96% of the float, secondary market trading volume is practically nonexistent, leaving the unit price flat and unresponsive to broader market rallies.
While the trust's regular quarterly distributions translate to a competitive yield of around 6.9% to 7.2% at current trading levels, a high yield from a structurally shrinking vehicle offers little comfort to minority investors who enjoy none of the capital compounding benefits a growing fund would provide.
The governance question
Structurally, Interise's governance framework is clean. The trust maintains an independent board, features no conflicted related-party construction pipelines, lacks a sponsor playing a dual engineering and construction contractor role, and avoids internal asset shifting. In terms of transparency, it ranks substantially higher than many of its domestic infrastructure peers.
The real question is one of strategic alignment. CPPIB and OMERS control the investment manager, own the overwhelming majority of the units, and solely dictate capital allocation. For nearly three years, they have chosen not to deploy fresh capital into major new project acquisitions while the core asset base ages.
While this is a completely legitimate capital management strategy for the two pension funds, minority public investors are left without any formal leverage to pivot the strategy. The trust lacks any captive development pipeline or a right-of-first-offer (ROFO) arrangement with an active developer to guarantee future scale.
What comes next
The structural endgame for an infrastructure trust that ceases to acquire is pure mathematics: assets expire one by one, overall distributions shrink proportionally, and the vehicle eventually winds down.
Interise is still far from the finish line. It has a solid portfolio, an efficiently managed Rs 8,038 crore debt profile, and deep-pocketed foreign backers.
However, the window to acquire value-accretive road assets-those featuring extensive remaining concession lives at sensible valuation multiples-is narrowing. In a highly competitive Indian market driven by the NHAI's Toll-Operate-Transfer (TOT) auctions and private developer exits, inaction carries a cost. With each passing year, a shorter weighted average concession life makes Interise a less potent currency for equity-funded expansions.
As credit rating firm ICRA noted in a recent report, the trust's financial flexibility will hinge directly on its long-term ability to raise fresh unit capital to onboard replacement assets while maintaining its current comfortable leverage profile (which sits at a moderate 42% of enterprise value).
Interise's next moves will show whether it was built to compound for the long haul, or simply designed to harvest and unwind. For now, the concession clock is ticking and the handbacks keep coming.
Published by HT Digital Content Services with permission from VC Circle.