A HoldCo is an intermediate holding company situated between the InvIT trust and underlying project SPVs to streamline debt financing, cash pooling, and administrative governance.
A company recognized under SEBI InvIT regulations in which the InvIT holds at least a 50% equity stake, and which in turn holds equity stakes in underlying SPVs executing infrastructure projects.
Instead of the Trust owning 12 different road companies directly, it creates a single intermediate company—the HoldCo. The HoldCo owns the 12 project companies. This creates a clean bridge for raising loans, pooling cash, and managing corporate filings.
Think of an umbrella structure: The Trust sits at the top with unitholders. Directly underneath is the HoldCo. Hanging below the HoldCo are six separate project companies running highway concessions across six states.
The 6 SPVs upstream ₹200 Cr of dividends and loan interest to the HoldCo. The HoldCo services ₹50 Cr of consolidated bond interest and upstreams the remaining ₹150 Cr directly to the Trust for unitholder distribution.
Under SEBI rules, a HoldCo cannot engage in any speculative commercial activities of its own; it must solely hold shares in infrastructure SPVs and distribute at least 90% of its net cash flow.
Evaluate whether your portfolio benefits from a HoldCo structure or direct SPV ownership based on tax pass-through efficiency and lender covenants.