Everything you need to know about Bharat Highways Infrastructure Investment Trust InvIT IPO

Bharat Highways Infrastructure Investment Trust InvIT is launching its IPO. The IPO opens for subscription on February 28, 2024, and will close on 1st March.

What do Bharat Highways InvIT do?

Established under the SEBI InvIT Regulations, Bharat Highways Infrastructure Investment Trust (InvIT) oversees a varied collection of infrastructure assets throughout India. Its primary objective is to acquire, manage, and invest in a portfolio of infrastructure assets within the country.

Presently, the trust manages seven road assets operating under the Hybrid Annuity Model (HAM) across Punjab, Gujarat, Andhra Pradesh, Maharashtra, and Uttar Pradesh. These assets collectively span approximately 497.292 km of constructed and operational roads, as outlined in the company’s RHP report.

These roads are maintained under concession rights granted by the National Highways Authority of India (NHAI). Additionally, the InvIT has entered into a Right of First Offer (ROFO) agreement with G R Infraprojects Limited (“GRIL”), providing priority access to certain road assets owned by GRIL. These assets are operated by specific Project Special Purpose Vehicles (SPVs) associated with the trust’s operations.

The Trust has been assigned provisional ratings of CRISIL AAA/Stable (Reaffirmed) from Crisil Ratings Limited, CARE AAA, Stable from CARE Ratings Limited, and IND AAA/Stable from India Ratings and Research.

What is the issue size of Bharat Highways Infrastructure Investment Trust InvIT IPO?

The public offering, amounting to Rs 2,500.00 crores, is a book-built issue consisting entirely of fresh issuance of 25 crore shares…

Financials of Bharat Highways Infrastructure Investment Trust InvIT IPO

Financial Year Total Assets (₹ crores) Total Revenue (₹ crores) Profit After Tax (₹ crores)
March 31, 2021 4943.94 2170.39 149.44
March 31, 2022 5536.39 1600.18 62.86
March 31, 2023 6056.27 1537.47 527.04
September 30, 2023 5916.79 388.54 101.35

Risk factors to consider:

Dependency on NHAI Annuity Income: The revenue of the InvIT heavily relies on receiving consistent annuity income from the NHAI for the infrastructure assets it holds. Any reduction or non-receipt of annuity income could adversely affect distributions to unitholders.

Asset Acquisition and Revenue Generation: Failure or inability to identify and acquire new infrastructure assets that generate comparable revenue may negatively impact the business, financial condition, and ability to make distributions.

Financial Covenants and Default Risks: Restrictive covenants in financing agreements with banks and financial institutions may limit flexibility in managing the business or using cash/assets. Defaults under existing financing arrangements could impact the InvIT’s ability to make distributions.

Distribution Dependency on Project SPVs Performance: The ability to maintain consistent distributions to unitholders depends on the financial performance and profitability of the Project SPVs. Insufficient operating profit from InvIT assets could affect distributions.

Dependency on Third Parties: Reliance on third parties for the operation and maintenance of InvIT assets poses risks of delays, defaults, or unsatisfactory performance, affecting effective operation.

Concession Agreement Termination: Premature termination of concession agreements for InvIT assets could result in non-receipt of payments due, leading to a material adverse effect on financial condition.

Regulatory Compliance and Permit Risks: The inability to renew or maintain statutory and regulatory permits and approvals necessary for operating InvIT assets could adversely affect business operations and financial conditions.

Limited Operating History: The InvIT lacks an established operating history, making it challenging for investors to accurately gauge future growth prospects and performance.

Schedule/Timeline of Bharat Highways Infrastructure Investment Trust InvIT IPO

Issue Period February 28, 2024, to March 01st, 2024
Price band ₹ 98 - 100
Minimum Bid quantity 150 & Multiples thereof
Deadline for accepting UPI mandate 5:00 PM on the issue Closing Date.
Finalization of Allotment March 04, 2024 - Monday
Initiation of Refunds March 05, 2024 - Tuesday
Credit of Shares March 05, 2024 - Tuesday
Date of Listing March 12, 2024 - Wednesday
Mandate end date March 16, 2024 - Saturday
Anchor Investors Lock-In End Date
(50% of the Investment) April 03, 2024 - Wednesday
Anchor Investors Lock-In End Date
(Remaining of the Investment) June 03, 2024 - Monday

Note: Given that the above schedule is tentative, it should be noted that the anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares, and 90 days after for the remaining portion.

How to apply for the Bharat Highways Infrastructure Investment Trust InvIT IPO?

You can apply for Bharat Highways Infrastructure Investment Trust InvIT IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite

  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status of the Bharat Highways Infrastructure Investment Trust InvIT IPO?

You can check the allotment status for the Bharat Highways Infrastructure Investment Trust InvIT IPO on the website of the Registrar and Transfer Agent. Alternatively, you can also check the allotment status on the NSE website.

1 Like

Hey @nithin_kumrr How about taxes on same? Also If I take funding and apply and shares get allotted. Can I claim exemption of interest paid on profit earned ?

@Quicko

Hey @akash_jhaveri7,

The listing gains will be taxed as short-term capital gains at 15%. Moreover, in the case of capital gains, you cannot claim the interest amount as an expense.

However, if you hold the shares for longer and you receive dividends on them, the interest can be claimed as a deduction with respect to such dividends. This deduction is limited to 20% of the total dividend received.