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Review By Dilip Davda on February 24, 2024
• BH-InvITs are controlling HAM based SPVs and currently operates on seven SPVs.
• It is meant for longer tenor investments by well-informed investors.
• The units are priced at a discount to its current NAVs.
• Well-informed/cash surplus investors may park funds for the medium to long term rewards.
ABOUT COMPANY:
Bharat Highways InvITs is an infrastructure investment trust established to acquire, manage and invest in a portfolio of infrastructure assets in India and to carry on the activities of an infrastructure investment trust, as permissible under the SEBI InvIT Regulations. It is settled by way of the Original Trust Deed, by GRIL (the Settlor), and registered as an infrastructure investment trust with SEBI on August 3, 2022 pursuant to the SEBI InvIT Regulations.
The Sponsor is engaged in testing services in the field of transportation engineering and has expertise in NSV survey, FWD survey, pavement design of roads and airports, physical and chemical testing of soil, lime, cement, road roughness testing, concrete and bituminous mix design of road projects. The Sponsor has setup a laboratory at its registered address which is accredited with National Accreditation Board for Testing and Calibration Laboratories for the discipline of chemical, mechanical and non-destructive testing. NMHPL, the Associate of the Sponsor is a road engineering, procurement, and construction company, with experience in design and construction of various road/highway projects. NMHPL has over six years of experience in the execution of infrastructure projects since 2017.
The Sponsor has an established track record of physical and chemical testing of soil and other material (cement testing, fly ash, bitumen emulsion, aggregate testing) at its laboratory accredited by NABL, which enables it to determine the appropriate material mix for development of bituminous and concrete road projects. Further, its capability to assess the roughness and balance life of road projects allows it to determine the appropriate maintenance activity to be undertaken on the road projects.
The Sponsor, through itself and its Associate, NMHPL, complies with the eligibility requirements under the SEBI InvIT Regulations of ensuring a sound track record in development of infrastructure. Its initial portfolio assets consist of seven road assets, all operating on HAM basis, in the states of Punjab, Gujarat, Andhra Pradesh, Maharashtra and Uttar Pradesh. These roads are operated and maintained pursuant to concession rights granted by the NHAI and are owned and operated by the Project SPVs, which are currently wholly owned by GRIL.
In addition, the InvIT has entered into a ROFO Agreement with GRIL, pursuant to which GRIL granted a right of first offer to the InvIT to acquire certain other assets owned and developed by GRIL. The InvIT intends to acquire 100.00% of the equity shares in each of the Project SPVs from GRIL will be acquired by the InvIT. As consideration for the acquisition of the equity shares of the Project SPVs, the InvIT will issue Units in accordance with the relevant Share Purchase Agreements to GRIL after the Bid/Issue Closing Date and prior to the Allotment in the Issue, i.e., the closing date pursuant to the Share Purchase Agreements. For all these seven SPVs, the adjusted enterprise value stands at Rs. 6342.90 cr.
ISSUE DETAILS/CAPITAL HISTORY:
The trust is coming out with its maiden InvITs issue for mobilizing Rs. 2500 cr. The issue opens for subscription on February 28, 2024, and will close on March 01, 2024. Post allotment, InvITs will be listed on BSE and NSE. The company has kept unit price band at Rs. 98 - Rs. 100 per unit. The minimum application to be made is for 150 units and in multiples thereon, thereafter. The non-institution portion is not less than 25% and Institutional portion is not more than 75% of the issue size. It has green shoe option to retail 25% oversubscription of the issue size as per SEBI InvIT Regulations.
The NAV of the Unit as of September 30, 2023satands at Rs. 122.18 and thuds at the cap price, the offer is at a P/BV of 0.82.
From the net proceeds of the issue, the it will utilize major funds for providing loans to the project SPVs for repayment/pre-payment in part or full, of their respective outstanding loans including interest and penalty, if any. The rest will be used for general corporate purposes.
The sponsor of this offer is Aadharshila Infratech Pvt. Ltd. while investment manager is GR Highways Investment Manager Pvt. Ltd. and the Trustee is IDBI Trusteeship Services Ltd.
The four Book Running Lead Managers to this issue are ICICI Securities Ltd., Axis Capital Ltd., HDFC Bank Ltd. and IIFL Securities Ltd. while KFin Technologies Ltd. is the registrar of the issue.
FINANCIAL PERFORMANCE:
On the financial performance front, on a combined basis, it has posted a total income/net profit of Rs. 2170.39 cr. / Rs. 149.45 cr. (FY21), Rs. 1600.18 cr. / Rs. 62.87 cr. (FY22), and Rs. 1537.47 cr. / Rs. 52.71 cr. (FY23). For H1of FY24 ended on September 30, 2023, it earned a net profit of Rs. 101.35 cr. on a total income of Rs. 388.54 cr.
The financial indebtedness of the trust as of February 01, 2024 is Rs. 3568.23 cr.
DIVIDEND POLICY:
The company will follow a prudent dividend policy as prescribed by SEBI InvIT Regulations and based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
There are no listed peers to compare with.
Review By Dilip Davda on February 24, 2024
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Bharat Highways Infrastructure Investment Trust offers an early investment opportunity in Bharat Highways Infrastructure Investment Trust. A stock market investor can buy Bharat Highways InvIT shares by applying in IPO before Bharat Highways Infrastructure Investment Trust shares get listed at the stock exchanges. An investor could invest in Bharat Highways InvIT for short term listing gain or a long term.
Read the Bharat Highways InvIT recommendations by the leading analyst and leading stock brokers.
Bharat Highways InvIT offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Bharat Highways InvIT Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Bharat Highways InvIT is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Bharat Highways InvIT.
The Bharat Highways InvIT allotment status will be available on or around March 6, 2024. The allotted shares will be credited in demat account by March 7, 2024. Visit Bharat Highways InvIT allotment status to check.
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