Neo Infra Income Opportunities Fund

November 2023
Strictly Private and Confidential 1
 Introducing
Neo Asset Management
 Neo’s senior leadership team

Nitin Jain Hemant Daga Puneet Jain Varun Bajpai A Srikanth

MD & Chairman Co-Founder & CEO CIO Co-Founder Co-Founder
Neo Group Neo Asset Management Neo Asset Management

Ex-CEO PAG -Edelweiss Ex-CEO Edelweiss Asset Ex Goldman Sachs Ex- Country Head Ex-CEO Motilal Wealth
Wealth Management Management Macquarie India Ex-CEO BridgeMonte Advisors
20 Years Experience 19 Years Experience 20 Years Experience 22 Years Experience 25 Years Experience
IIT Kharagpur, IIM Calcutta St. Xaviers, IIM Bangalore IIT Kanpur, IIM Ahmedabad BIT Mesra, IIM Calcutta ICFAI Business School
Global Indian of the Year Private Debt Turnaround
2021 – Asia One Titan 2019 - PDI

Each of Our Senior Leaders has Managed

Large Businesses, Large Capital And Large Teams for Decades
Group overview

2 - year journey

Net Worth Total Assets

~INR 700 Cr ~INR 25,000 Cr +

Peak XV invested company Total clients

(erstwhile Sequoia) 1,000+
 Investing in
Operating Infrastructure Assets
A good fixed income solution should have

Regular Safety of Superior

Cashflows Capital Risk-adjusted
Returns
 Regular Cashflows from
government entities such

India offers a large and as NHAI, NTPC, etc.

attractive investment
opportunity in Operating
Infrastructure assets which Safety of Capital as fully
operational projects
fulfills all these criteria

Superior Risk-
adjusted Returns
With differentiated characteristics of yielding infra-assets

1 2
“… infrastructure
Predictable, steady asset class may
cashflows due to long- Monopolistic provide investors
term contracts with a degree of
protection from the
business and
3 4 economic cycles, as
well as attractive
Inflation protected Healthy distribution yields income yields and
an inflation hedge”

- S&P Global
8
Investors can access operating infrastructure assets by

Banks averse to lending to mid

Owning a listed infrastructure stock
sized and lower rated
corporates

Owning operating assets which directly

give access to the cash flows

9
Listed infra stock might not give the desired result

Market Balance sheet Not a pure play

fluctuations risk on operating
assets
Infra stocks in the last Project can be good,
Mingling with other
decade have given sub- but companies can
businesses within the
optimal returns have other issues
company
2 ways of owning operating infra income assets

A B

Operating asset
Owning an
ownership
InvIT
through AIFs

11
 A Owning an InvIT
➢ Pure play access to operating
All operating assets cashflows
generating cashflows Pros ➢ Less exposure to market fluctuations
➢ Healthy returns comprising of annual
Asset 1 Asset 2 Asset 3 Asset 4
coupons and capital gains

➢ Limited access in the case of private

InvITs
Cons

NHAI Privately listed InvIT

Directly owns road assets with government as counterparty
Listed on December 2021
Listed on
Interest/Annual distribution ~ 6-7% p.a.
stock exchange
Capital appreciation ~ 8-9% p.a.
Some privately listed InvITs are only
accessible to institutions like insurance Total returns ~ 15-16% p.a. *
companies, pension funds, etc.

12
* Based on estimated NAVs
B Operating asset ownership through AIFs – Pre InvIT Play

All operating assets ➢ Pure play access to operating cashflows

generating cashflows Pros

➢ Zero market fluctuations
➢ Higher returns compared to public and
Asset 1 Asset 2 Asset 3 Asset 4 private InvIts

Cons ➢ Lower liquidity

Returns made by global funds in India:

AIFs and Funds

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 1
Operating asset

Neo Infra Income Fund ownership through AIFs

gives a unique opportunity to through

earn regular cashflows and
2
superior returns
Owning an InvIT
1
Operating asset ownership through AIFs
How returns are made

Journey of a road asset:

Government pays Balance 60% is paid

Developer wins 40% in 2 years
Government to developer in half-
tender and starts
releases tender Developer finishes yearly instalments
construction
road in 2 years in ~15 years

15
1
Operating asset ownership through AIFs
How returns are made

Journey of a road asset Paid by NHAI

Government pays Balance 60% is
40% in 2 years paid to developer H1 H2 H3 H4....... ...H29 H30
in half-yearly
Developer finishes instalments in ~15 Revenue
road in 2 years years
Less: Maintenance
expenses

Net Cashflow
Neo Infrastructure Neo Infrastructure
Income Income Fund buys
Opportunities the operating asset
Fund enters by discounting net
Base IRR of
cashflows over ~15 ~15-16% p.a.
years by discounting
the net future
cashflows

16
1
Operating asset ownership through AIFs
How returns are made

1. Sale to InvIT

Operating
assets Value Estimated 2. Sale to strategic
Exit
acquired at addition IRR of investor
through
base IRR of ~1% p.a ~17% p.a.
~16% p.a. Leading to
capital
gains of ~3-
4% p.a.

Total estimated returns of ~20% p.a.

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1
Operating asset ownership through AIFs
What are the risks

Road in under construction, Neo Infra Income fund only buys operating
Land is to be acquired roads

Covered by insurance, NHAI extends revenue

Flood has washed away road
period to compensate for revenue loss

~95% of toll collection in India is through Fast

Toll is not collected
tags

State projects sometimes Neo Infra Income fund will only own central
have issues government road assets

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2
Owning an InvIT
How returns are made

Addition of
Base IRR of Private to
IRR through Estimated
~12-13% public
more asset returns of
p.a. listing gains
purchase ~16% p.a.
~2% p.a.
~1% p.a

Total estimated returns of ~16% p.a.

19
What is in it for investors?
What is in it for investors

Diversified Portfolio Mix

25-30% 70-75%

1 2
Privately listed InvITs Operating asset ownership
through AIFs
• Provide steady yields and • Acquire & aggregate assets
establish a base return for • ~70-80% of assets to have
the fund central government
• Total returns of ~16% counterparties such as NHAI,
p.a. NTPC, MORTH, SECI, etc.
• Total returns of ~20% p.a.

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What is in it for investors

8-9% p.a. Better than fixed deposit

Distributed as returns with cashflows from
annual
cashflows interest payments government entities such as
NHAI, NTPC, MORTH, SECI, etc.

Estimated 5-6% p.a.

returns of step up
~18-20% p.a. coupon

Distributed as Capital gains makes it

capital gains on Fixed Deposit ++
exit
3-4% p.a.
capital
gains
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What is in it for investors
Comparison with other fixed income instruments

Regular
Investment instrument Risk Tax efficiency Returns
distributions

Bank fixed deposits High Low Full tax Low

Government bonds High Low Full tax Low

AAA/AA corporate bonds High Low Full tax Low

Listed InvITs High Low Medium Medium

Equity markets Low High High Medium-High

Infrastructure AIFs/Funds High Low Medium-High High

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What is in it for investors

1. Participate in India’s largest opportunity

2. India has built more roads and solar projects

in last 6-7 years than in the last 70 years

3. In the next 4 years, 400 small road assets

will come up for sale

4. In the next 4 years, 300-400 solar assets will

come up for sale

5. India requires new capital to build roads

and solar projects in coming 4 years

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 Know your team at
Neo Infrastructure Income Opportunities
Fund
Know your team

1 2 3
Fund manager
Investing team
with total
Total team size has done 3
investing
10 members successful exits
experience of 15
out of 6 in India
years+

4 5 6 Investment
Solar platform committee
head has built 2 Road platform
head has built managed India’s
GW capacity in first offshore and
India (4% of total 9,000 lane km of
roads first domestic
India’s capacity) Infra fund

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 Highly experienced professional in the Infrastructure space
to lead the fund
Abishek Goel
Head – Infrastructure & Real Assets
$750Mn + 750MW 450bps 4
IIM Bangalore | IIT Kanpur Renewable Energy Savings in $250Mn
Direct Investments Successful Exits
capacity built refinancing

Infrastructure Investing Experience(2009-23)

2002 2004-09 As part of US$750m Actis 2013-17 2017-23

Infra Fund 2, invested
US$150m in India

2001 2004 Advised on over US$10bn Advised marquee global

of transactions in non- investors on >US$1 bn of • Built from scratch: 750MW renewable
IIT Kanpur IIM Bangalore
infra sectors
2009-13 investments in Indian platform through inorganic acquisitions and
infrastructure exited profitably to a global energy player.
• $250Mn refinancing leading to significant
Developing Infrastructure secondary market in India value add by savings of 450bps
• Affected exit in a tough legacy investment
• 15+ years of experience of investing in Indian infrastructure
through litigation
• Overall 21+ years of experience in infrastructure investing, M&A advisory, and strategy consulting
• Participated in world’s largest deal in
• Significant hands-on experience in renewable energy, roads & highways water sector (~US$14 bn) where the Suez
• Deep expertise in India’s contractual ecosystem Group was acquired by a consortium of
• Proven track record of alpha generation through financial and operational efficiencies investors led by GIP
• Involved in marquee deals in India and globally
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With senior oversight from industry stalwarts
Nitin Jain, Founder & Chairman, Neo Group
• More than 20 years of extensive financial markets experience
• Has built and scaled multiple businesses to leading franchises in India in wealth management, asset
management, retail broking and treasury Banks averse to lending to mid
• Led wealth business of PAG-Edelweiss from 2010 to 2021 to make it one of the country’s largest wealth
sized and lower rated
management businesses with assets-under-advice of more than ~2,00,000 Cr.
• Alumnus of IIT Kharagpur and IIM Calcutta
corporates
Hemant Daga, Co-Founder & CEO, Neo Asset Management
• More than 19 years of experience in Indian financial services
• As CEO, built up Edelweiss’ Asset Management business to make it one of India’s largest platforms having
more than ~INR 30,000 crs of alternative assets and ~INR 75,000 crs of mutual fund assets
• Worked at ICICI Bank prior to joining Edelweiss
• Alumnus of St. Xaviers, Calcutta and IIM Bangalore

Varun Bajpai, Co-Founder

• More than 20 years experience in Indian financial services
• Country Head for Macquarie India for nearly a decade and CEO of US$ 1.2 bn India infrastructure fund.
• Part of Investment Banking team at Deutsche Bank and Kotak, across India, Hong Kong & Singapore
• Responsible for Investment Banking, Fixed Income Markets and Insurance Broking businesses at Edelweiss
• Featured as a leading deal maker and fund manager in India over the years
• Alumnus of Birla Institute of Technology Mesra and IIM Calcutta
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Seasoned operating team to handle project operations and
value additions
Yudhvir Singh Gulia, Head - Renewables Operations

• Seasoned engineering professional with 25+ years of experience including 13+ years of experience in
Operation and Maintenance of Solar Power Projects
• Joined from Vector Green Energy (renewables platform of Global Infrastructure Partners) where he was VP &
Head - O&M (Solar)
• Expertise in all aspects of solar O&M, identifying improvement areas and implementation of operational
improvements including retrofits of operating plants
• Involved in implementation of over 2 GW of solar projects (4% of India’s solar capacity)
• Prior experience with ACME Solar and Applied Solar Technologies

Vishal Shirode, Head – Roads Operations

• Engineering Professional with 16+ years with domain expertise in EPC, HYBRID & BOT Highway sector
across civil construction, operations – ~9,000 lane kms delivered
• Joining from one of largest airports of the country where he is head of maintenance of all airside
infrastructure like runways, taxiways, aprons, drains, and compound walls
• Prior experience of roads and highways with marquee road developers and concessionaires like Highway
Concession One (HC1) (KKR’s roads platform), Dilip Buildcon and Reliance Infrastructure
• Expert at costing, design, traffic surveys, bidding, construction supervision, revenue audits, value engineering
• Has worked in EPC / HAM bids towards cost analysis & value engineering. Has developed audit skills as part
of revenue control team implementing MIS systems and processes.
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Qualified investments team with significant infra investing
background
Ashutosh Ojha, Managing Director
• More than 17 years of extensive financial markets experience
• More than 10,000 cr worth of trades negotiated and executed over last decade
• Successfully led a SEBI Cat. II AIF credit fund at previous employer with marquee deals
• Alumnus of IIT Kanpur and IIM Lucknow

Vijay Gupta, Investment Associate

• More than 8 years of experience;
• Worked at NIIF; worked on evaluating multiple infrastructure projects from a credit risk perspective
• Alumnus of IIM Indore and IIT (BHU), Varanasi

Saurabh Sareen, Investment Associate

• More than 6 years of experience; Joining from a leading PE backed renewabIes platform
• Worked on multiple M&A and PE deals cumulating to more than 2 GW of renewable energy assets
• Prior experience in infrastructure M&A advisory with Yes Bank and Avendus
• Alumnus of NMIMS, Mumbai and University of Delhi

Gaurav Mukhi, Investment Associate

• Worked at ICICI Bank; experience in handing marquee private equity clients with cumulative deal size of over
INR 1,500 crore
• Experience in strategic understanding of PE fund investments and patterns in India
• Alumnus of Symbiosis School of Economics, Pune and NMIMS Mumbai 30
Our Investment philosophy
Neo Infra Income Fund delivers healthy risk adjusted
returns with clear investment guidelines
01 02 03

Invest only in Contracts with credible

Long Residual
Operating Assets Counterparties life of assets

04 05

Ability for Well defined Well high

Very defined selection
threshold on
Financial & Operational Regulatory Framework criteria to deliver
counterparty selection
Improvement Superior Yield

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Deals worth INR 1500 crore already in the works
Indicative Deal Pipeline:
Indicative
Target
Deal description Size Sector Status Remarks
returns
(INR cr)
NHAI InvIT 100 Roads 16% Completed • Already acquired
• Neo Infra is highest bidder
4 lane NHAI BOT (Toll) road - #1 100-125 Roads 21% Very advanced
• Deal closure after NHAI approval
4-lane NHAI BOT (Toll) Road – 2 100-150 Road ~20% In discussions • Valuation discussions ongoing
• Information received
4-lane BOT (Toll) Road – 3 100-150 Road ~20% In discussions
• Preliminary evaluation ongoing
30MW Solar plants selling power to SECI 90-100 Solar ~20% In discussions • Valuation discussions ongoing
• Information received
25MW Solar plants selling power to SECI 75 Solar ~20% In discussions
• Preliminary evaluation ongoing
• Early engagement
Portfolio of 6 HAM roads 500-600 Road ~20% Early
• Detailed information awaited
Pvt Listed Solar InvIT #1 200 Solar ~15% Advanced • Valuation discussions ongoing
Pvt Listed Solar InvIT #2 200 Solar ~15% Early • Early engagement
TOTAL 1,465-1,700

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Completed Deal : NHAI InvIT
Description

• Private listed InvIT sponsored by NHAI – to be publicly listed by June 2025

Deal Size :
• Diversified portfolio of key stretches of Golden Quadrilateral / East-West corridor Rs 100 cr
aggregating 1,275 kms of NHAI highways collecting tolls of ~INR 1,600 cr annually
• Key investors : Canadian pension funds - OTPP and CPPIB

Investment Tenure:
Why we like this deal?
3-4 years
• Strong AAA counterparty, no construction risk, long concessions, stable predictable cash
flows due to long history of traffic, diversified portfolio
Average annual
• Low concession and regulatory risks owing to NHAI being Sponsor of InvIT
distribution :
~6-8%
Status and Neo involvement

• Two rounds of monetization already done; fund raising for Round 3 assets ongoing Overall
Target Returns: ~16-
• Conducted thorough due diligence incl meetings with NHAI Chairman, InvIT CEO and
management 17%
• Purchased units worth INR 100 cr through secondary trades and warehoused for Fund
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Key Fund Terms
Neo Infra Income Opportunities Fund Terms
Category SEBI registered Category II AIF
Structure Close ended
Fund Size ~ INR 2000 crores
Expected IRR ~ 18-20 % p.a.
Fund Term 7 years from first close
Return Profile Coupon Distribution + Capital Appreciation
Fund Structure
Drawdowns 6
Estimated Number of Fund Investments 10 to 12
Sector Focus Road & Renewables
Investment Manager Neo Asset Management Private Limited

Particulars Description
Fund Auditors Big 4
Fund Legal Counsel IC Legal
Tax Advisors BDO
Key Service
Custodian ICICI Bank
Providers
Registrar and Transfer Agent Kfintech
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Fee Structure & Drawdown Schedule

Drawdown Notice
Management Fees Issued
Class of Units Contribution Carry
p.a
INR 1 Cr to INR 3
Class A1 units 20% without catch-
Crs 2.00%
up. Hurdle 10%

INR 3 Crs to INR 10 15% without catch-

Class A2 units
Crs 1.75% up. Hurdle 10% 15 Business 5 days grace
days to period to
contribute contribute
INR 10 Crs to INR 25 10% without catch-
Class A3 units Crs 1.50% up. Hurdle 10%

7.5% without
More than INR 25
Class A4 units catch-up. Hurdle
Crs 1.00% 10% Fund makes
investment

37
Thank You
Disclaimer

This presentation is issued on a confidential basis by Neo Asset Management Pvt Ltd. This presentation is being issued by Neo Asset Management Pvt Ltd on a strictly private and confidential
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current, and you should not rely on the information provided in this presentation for any purpose.

39
Disclaimer

Neo Asset Management Pvt Ltd does not accept any responsibility whatsoever or liability for any direct, indirect or consequential loss or damage suffered or incurred by you or any other
person or entity, however caused, in any way in connection with the information directly or indirectly provided in this presentation or the authenticity, accuracy or completeness of such
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performance is not a guarantee, projection or prediction and is not necessarily indicative of future results. Due to various risks and uncertainties, actual events or results, the actual
performance of the investments may differ materially from those reflected or contemplated in this presentation. Actual events or results often depend upon factors that are beyond the
control of Neo Asset Management Pvt Ltd. There can be no assurance that investors will receive a return of their capital. There can be no assurance that any of the Funds will achieve
comparable results, that historical trends will continue, that estimated, or target returns will be met or that any of the Funds will be able to implement its investment strategy and
investment approach or achieve its investment objectives. As used throughout this presentation, and unless otherwise indicated, all returns are presented on a “gross” basis. Gross IRRs
and gross multiples of invested capital (i.e., the total combined value divided by the invested amount) do not reflect management fees, “carried interest,” taxes (whether borne by
investors or entities through which they participate in investments), broken-deal expenses and other transaction costs in connection with the disposition of unrealised investments and
other expenses to be borne by investors in a Fund, which will reduce returns and in the aggregate are expected to be substantial. Prospective investors should review carefully the notes
and other qualifying information accompanying the presentation of performance information and feel free to ask the manager / advisor any questions on types of fees they might pay.
The case studies used in the presentation herein are purely for illustrative purposes only and based on the information available in public domain, consultants or third-party professional
advisors. It should not be assumed that investments made in the future are comparable in quality or performance to the investments described herein. The cases studies discussed in the
presentation are illustrated representing in professional capacity as members, partners, stockholders, managers, directors, officers, employees, advisers, representatives do not
necessarily represent the views of Neo Asset Management Pvt Ltd relying on information available in public domain, consultants or third-party professional advisors without breaching
any confidentiality.
An investment in a Fund involves a high degree of risk (including the possible loss of a substantial part, or even the entire amount, of an investment) and potential conflicts of interest
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40
Annexure
Operating asset ownership through AIFs – Solar Asset
How returns are made

Journey of a solar asset Paid by NTPC

Fully operated solar
plant with long term H1 H2 H3 H4....... ...H24 H25
power purchase
contracts with Revenue
government entities like
NTPC and SECI Less: Maintenance
expenses

Net Cashflow

Neo Infrastructure
Income
Opportunities Base IRR of ~15-
Fund enters 16% p.a. by
discounting the
net cashflows

Regular revenues from fixed tariff prices for long term power supply to government entities like NTPC,
SECI, etc.
42