CS Professional · Strategic Management and Corporate Finance · Infrastructure Investment Trusts
A listed InvIT has InvIT assets of ₹3,000 crore. It has consolidated borrowings of ₹2,000 crore and deferred payments of ₹200 crore, and holds cash and cash equivalents of ₹300 crore. The borrowing ceiling is 70% of the value of InvIT assets, computed on borrowings and deferred payments net of cash and cash equivalents. What additional borrowing is permitted?
Additional borrowing of ₹200 crore is permitted. Borrowings plus deferred payments of ₹2,200 crore, less cash of ₹300 crore, give net borrowings of ₹1,900 crore. The ceiling is 70% of ₹3,000 crore, or ₹2,100 crore, so the headroom is ₹200 crore.
- A₹200 croreCorrect
- B₹0
- C₹400 crore
- D₹500 crore
Explanation
Net borrowings = 2,000 + 200 − 300 = ₹1,900 crore. Ceiling = 70% × 3,000 = ₹2,100 crore. Headroom = 2,100 − 1,900 = ₹200 crore. ₹0 results from ignoring the cash netting (2,200 exceeds 2,100). ₹400 crore results from omitting the deferred payments.
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