CORPORATE WISDOM · INVIT AND INFRASTRUCTURE

InvIT NAV

In One Sentence

Net Asset Value (NAV) represents the fair market equity value of an InvIT's underlying infrastructure portfolio after deducting consolidated liabilities, divided across all issued units.

InvIT NAV per Unit = (Fair Market Value of Trust Assets − Consolidated Net Liabilities) ÷ Total Outstanding Units

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PRACTICAL FRAMEWORK

Executive Perspectives & Ground Reality

Literal Meaning

Net asset value is calculated using the applicable asset-valuation and liability methodology, with the prescribed review and disclosure frequency for the relevant InvIT structure.

Plain Language

NAV is the true asset-backed worth of one unit. If you sold all the highways, power lines, and solar plants at fair independent appraisal value, paid off all bank debts, and divided the remaining money by the total units, that is the NAV per unit.

Picture It

An InvIT's independent appraisal confirms asset value of ₹10,000 Cr. Consolidated debt is ₹4,000 Cr. Net equity value is ₹6,000 Cr. With 50 Crore units issued, the NAV is exactly ₹120 per unit.

See the Numbers

If NAV is ₹120 and the unit trades at ₹110 on the stock exchange, it trades at an 8.3% discount to NAV. If it trades at ₹126, it trades at a 5.0% premium, signaling strong investor confidence in management's acquisition and distribution capabilities.

Ground Reality

InvITs that consistently deliver on NDCF forecasts trade close to or above NAV. InvITs with traffic misses or dispute overhangs often trade at steep discounts to NAV.

Decision View

Track trading price against NAV: when units trade at a premium to NAV, issuing new units to buy assets is accretive to existing unitholders.

ASK MANISH KNOWLEDGE BRIDGE

What role does valuation play in an InvIT?

Explore practical implications, sponsor nuances and execution realities with Manish Satnaliwala.

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What InvIT NAV Is Not

InvIT NAV and Public Trading Unit Price

The trading price on stock exchanges reflects secondary market supply and demand, while NAV represents the independently appraised fair value per unit.

InvIT NAV and Promoter Derived Valuation

Use an independent valuer satisfying the applicable InvIT requirements. Valuation methodology and assumptions must be justified; not every relevant professional registration is a SEBI registration.

InvIT NAV and Historical Book Value

NAV accounts for future discounted concession cash flows and asset condition, rather than historical depreciated accounting cost.

InvIT NAV and Static Metric

NAV changes with asset valuations, liabilities and unit counts. Apply the current valuation and disclosure schedule rather than assuming that NAV is static or identical to the trading price.

Questions Business Leaders Ask About InvIT NAV

How sensitive is our NAV to a 50 bps increase in the valuation discount rate (WACC)?

Conduct sensitivity analysis across DCF models.

NORTHAXIS ADVISORY · INVIT SPECIALISATION

InvIT Readiness, Structuring & Capital Markets Advisory

NorthAxis Advisory supports infrastructure developers, sponsors and asset owners in assessing InvIT viability, cash-flow predictability, HoldCo/SPV holding structures, valuation readiness and governance frameworks. All regulated intermediary roles are performed by registered SEBI intermediaries.

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