The Bharat Highways InvIT IPO commences trading today, February 28, and will conclude on March 1. This initial public offering introduces Bharat Highways InvIT, an infrastructure investment trust managing a portfolio comprising seven highways across India. Investors are presented with a book-built issue valued at ₹2,500 crores, featuring a price range per share between ₹98 and ₹100.
Today, on Wednesday, February 28, the subscription for the Bharat Highways InvIT IPO officially commences, with the closing date set for Friday, March 1. Preceding this, on Tuesday, February 27, the IPO garnered significant interest from anchor investors, raising a total of ₹825.97 crore. The company confirmed the allocation of 8,25,97,350 equity shares at a price of ₹100 per share to these anchor investors.
The price band for the Bharat Highways InvIT IPO has been established within the range of ₹98 to ₹100 per equity share. Additionally, the lot size for this IPO is 150 equity shares, with subsequent multiples available in increments of 150 equity shares.
In the Bharat Highways InvIT IPO, a maximum of 75% of the offer size of shares in the public issue has been reserved for Qualified Institutional Buyers (QIBs). Additionally, not less than 25% of the net issue is reserved for Non-Institutional Investors (NIIs).
Tentatively, the basis of allotment of shares for the Bharat Highways InvIT IPO is set to be finalized on Monday, March 4. Subsequently, the company plans to initiate refunds on Tuesday, March 5, while crediting the shares to the demat accounts of allottees on the same day. It is expected that Bharat Highways InvIT shares will be listed on both the BSE and NSE on Wednesday, March 6.
Bharat Highways Infrastructure Investment Trust is an infrastructure investment trust focused on acquiring, overseeing, and investing in various Indian infrastructure assets. Operating in compliance with SEBI InvIT Regulations, the Trust conducts operations related to infrastructure investment trusts.
The company’s portfolio encompasses seven highways located in Uttar Pradesh, Gujarat, Andhra Pradesh, Maharashtra, and Punjab, all operated under the Hybrid Annuity Model (HAM). These highways are owned and managed by Project SPVs, currently wholly owned by GRIL, and operated and maintained in line with concession rights granted by the NHAI.
In the fiscal year from March 31, 2022, to March 31, 2023, Bharat Highways Infrastructure Investment Trust witnessed a notable increase of 738.34% in its profit after tax (PAT), despite a slight decline of 3.92% in revenue during the same period.
The Bharat Highways InvIT IPO is a book built issue valued at ₹2,500 crores, consisting entirely of a fresh issue of 25 crore shares.
The net proceeds from the IPO will be utilized for general purposes and to extend loans to the Project SPVs, enabling them to fully or partially repay their existing debts, including any accrued interest and prepayment penalties.
The lead managers for the IPO are HDFC Bank Limited, Axis Capital Limited, IIFL Securities Limited, and ICICI Securities Limited, while KFin Technologies Limited is the Registrar for the issue.
IDBI Trusteeship Services Limited serves as the InvIT’s Trustee, while GR Highways Investment Manager Private Limited operates as the investment manager and Aadharshila Infratech Private Limited acts as the sponsor.
Bharat Highways InvIT IPO Grey Market Premium (GMP) today stands at ₹0, indicating that shares are trading at their issue price of ₹100 with no premium or discount in the grey market, as reported by investorgain.com.
Grey market premium reflects investors’ willingness to pay more than the issue price.
Regarding the Bharat Highways InvIT IPO review:
- Dilip Davda, contributing editor at Chittorgarh, stated that the company operates seven highway projects under its current seven SPVs primarily on Hybrid Annuity Model (HAM). Given the lack of track records for such InvITs and the market’s limited understanding of the instrument, he suggests that well-informed or cash-surplus investors may consider applying for potential medium to long-term rewards.
- BP Wealth, a brokerage firm, highlights that the future growth of the InvIT will be influenced by GR Highways Investment Manager Private Limited and its current and potential subsidiaries’ access to future road assets. Additionally, the plan to utilize the net proceeds from the new equity offering to prepay or repay loans made to the Project SPVs is expected to improve the InvIT’s leverage position.
Financially, as of February 01, 2024, the company carried financial debts amounting to Rs. 3,568.2 crores. In the first half of the financial year 2023-24 (H1FY24), the firm recorded a net profit of Rs. 101.4 crores on total income of Rs. 388.5 crores.
The brokerage believes that utilizing the net proceeds from the fresh equity issue to repay or prepay loans to the Project SPVs will enhance the InvIT’s leverage position. With the current Price-to-Book Value (P/BV) multiple standing at 0.8x based on the book value as of September 2023, the company is considered reasonably valued. The brokerage advises investors to “Subscribe” to the issue from a medium to long-term perspective.
Disclaimer: The views and recommendations mentioned above are those of individual analysts or broking companies, and do not represent the views of Bystox. We encourage investors to consult certified financial experts before making any investment decisions.