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• HIT is road infrastructure investment trust with six SPVs under its fold.
• Funds mobilized through this RI will be used for acquisition of 100% in SPVs.
• No market trade data is available for HIT on NSE- the designated exchange.
• Only well-informed/cash surplus/risk seeker HNIs may park funds for long term considering the minimum lot.
ABOUT COMPANY:
Highway Infrastructure Trust (HIT) is an Indian infrastructure investment trust, which proposes to invest in road infrastructure assets and is sponsored by Galaxy Investments II Pte. Ltd. (the "Sponsor"). Highways Trust has a portfolio consisting of six Highways SPVs having an aggregate of 451.98 kms (1,710 lane kms), located across six states in India. The Projects are divided into two types on the basis of the implementation mode: (i) toll and (iii) annuity.
The Sponsor is affiliated with funds, vehicles and/or entities managed and/or advised by affiliates of KKR. As on date, the Sponsor is a 100% subsidiary of Galaxy Investments Pte. Ltd., which is majority owned and controlled by KKR Asia Pacific Infrastructure Holdings Pte. Ltd. Founded in 1976, KKR is a leading global investment firm, with approximately US$519 billion of assets under management as of June 30, 2023, that offers alternative asset management as well as capital markets and insurance solutions. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds.
KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people and supporting growth in its portfolio companies and communities. In 2008, KKR established a dedicated infrastructure team and strategy focused on global investment opportunities. KKR has been one of the more active infrastructure investors globally over the past several years, having made approximately 75 infrastructure investments globally and more than US$50 billion in assets under management within infrastructure.
Today, KKR's Infrastructure platform has expanded to include approximately 90 dedicated investment professionals across 10 offices covering a broad spectrum of investment opportunities in various infrastructure subsectors, including: midstream energy, renewables, power & utilities, water and wastewater, waste, telecommunications and transportation, among others. KKR continually monitors infrastructure sectors and infrastructure-related investments for emerging trends, and may identify and prioritize investments in other sectors as conditions change or cycles evolve. KKR has invested or committed over US$6.7 billion of equity in private equity and infrastructure deals in India since 2010 with over 20 investments made and more than a dozen active portfolio companies today. KKR believes the long-term economic outlook in India is positive given structural reforms, despite recent volatility and continue to see attractive investment opportunities in the country. As of June 30, 2023, the Highways SPVs have 171 permanent employees and 618 contractual employees.
ISSUE DETAILS:
The Trust is coming out with its Rights Issue (RI) of 65952380 units at a fixed price of Rs. 77.96 per unit to mobilize Rs. 514.17 cr. The RI opens for subscription on October 09, 2023, and will close on October 11, 2023. The Trust is offering RI in the ratio of 10 for 63 to eligible unitholders as of the record date of September 29, 2023. The full amount is to be paid on application for number of units applied. Post allotment, Units will be listed on NSE.
The Units of the Highways Trust shall be tradable only in dematerialized form. As the trading lot size comprises of 2,00,000 Units aggregating to Rs. 2 cr. in accordance with InvIT Regulations for the Highways Trust. The minimum application in the Issue by any Investor shall be for 2,56,542 Units. The minimum allotment to any Investor shall not be less than Rs. 2 cr. Fractional Entitlements will not be credited to the Unitholders' accounts and the trading of fractional entitlements of Rights Entitlements will also not be allowed by the Stock Exchange. The HIT is rated CRISIL AAA/Stable by CRISIL Ratings, and IND AAA/Stable by India Ratings.
HIT is likely to spend Rs. 4.10 cr. for this RI process and from the net proceeds, it will utilize funds as detailed here.
The funds so mobilized will be used for acquisition of 100% of the issued, subscribed and paid-up share capital of the Target SPV, Repayment of the outstanding debt of the Target SPV, and the rest for general corporate purposes.
The initial portfolio of assets of the Highways Trust comprises six SPVs namely, DBCPL, GEPL, JPEPL, UEPL, NBL and SEPL. The Highways Trust proposes to acquire ANHPL as the seventh SPV through the proceeds from this Issue.
The Units have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws. Accordingly, the Units are being offered and allotted outside the United States in offshore transactions in reliance on Regulation S under the Securities Act ("Regulation S") and applicable law of the jurisdictions where such offers and allotments occur.
Axis Capital Ltd. Is the sole lead manager for this RI and Link Intime India Pvt. Ltd. Is the registrar of the issue. Galaxy Investments II Pte. Ltd. Is the Sponsor and Axis Trustee Services Ltd. Is the Trustee. Investment Manager to the issue is Highway Concessions One Pvt. Ltd., and the Project Manager is HC One Project Manager Pvt. Ltd.
Post-RI, HIT's current outstanding 415500000 units will stand enhanced to 481452380 units, while sponsor units will be 373900000.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, HIT has (on a consolidated basis) posted a total income /net profit of Rs. 198.01 cr. / Rs. 44.84 cr. (FY22), and Rs. 643.11 cr. / Rs. 34.20 cr. (FY23).
DIVIDEND POLICY:
The offer document is silent on dividend policy. It may adopt a prudent dividend policy based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: HIGHWAYS (FV Rs. NA).
No price movement data is available on NSE for this company that is very surprising. It may be due to its minimum market lot of Rs. 2 cr. in value terms.
Review By Dilip Davda on October 7, 2023
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 Highways Infrastructure Trust Rights Issue 2023 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if Highways Infrastructure Trust Rights Issue 2023 worth investing. The Highways Infrastructure Trust Rights Issue 2023 Note sets the Rights Issue expectations in systematic way which tells you if Highways Infrastructure Trust Rights Issue 2023 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Highways Infrastructure Trust Rights Issue 2023 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.
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