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Capital Infra Trust, previously known as National Infrastructure Trust, launched its Infrastructure Investment Trust (InvIT) IPO earlier this week, aiming to raise INR 1,578 crore. The issue includes a fresh issue of INR 1,077 crore and an offer for sale of INR 501 crore. Backed by Gawar Construction Limited, the trust manages nine revenue-generating road assets spanning 682.425 kilometers across India. With a price band set at INR 99-100 per unit, the IPO has already attracted INR 703 crore in anchor investments, signalling strong institutional interest. The proceeds will be used to repay debts and strengthen its infrastructure projects.
Capital Infra Trust, formerly recognised as the National Infrastructure Trust, recently introduced its Infrastructure Investment Trust (InvIT) IPO, seeking to raise INR 1,578 crore. This offering consists of a fresh issue valued at INR 1,077 crore and an offer for sale of INR 501 crore by its sponsor, Gawar Construction Limited. With a price band set at INR 99-100 per unit, the IPO opened for subscription earlier this week, offering investors an opportunity to engage with India's growing infrastructure sector. Investors must bid for a minimum of 150 units, amounting to approximately INR 14,850. Advertisement
Established in September 2023, the trust focuses on acquiring and managing infrastructure assets across the country. Its portfolio currently comprises nine fully operational and revenue-generating road projects, covering over 682 kilometers across states such as Haryana, Rajasthan, Bihar, and Karnataka. These assets are pivotal to its strategy for generating consistent returns.
Infrastructure Investment Trusts (InvITs) are collective investment vehicles regulated by the Securities and Exchange Board of India (SEBI). They allow individual and institutional investors to pool funds, which are then invested in income-generating infrastructure assets such as highways, bridges, power transmission lines, and more. InvITs offer regular returns to investors, typically in the form of dividends or interest, while also providing capital appreciation through their underlying assets.
Capital Infra Trust's InvIT operates under this model, providing investors with an opportunity to gain exposure to India's infrastructure sector without directly owning or managing these assets. By listing its units on the BSE and NSE, the trust ensures liquidity and accessibility for retail and institutional investors alike.
Proceeds from the IPO will be used to reduce external borrowings by project SPVs, including repayment of unsecured loans provided by the sponsor. This financial restructuring aims to ease liabilities and support the seamless management of its assets. Ahead of the public issue, Capital Infra Trust raised INR 703 crore through its anchor book from 27 institutional investors, highlighting strong confidence in its operational model. Following the IPO, the trust plans to list its units on both BSE and NSE, enhancing liquidity and providing investors with greater market access.
The trust's hybrid annuity model projects with the National Highways Authority of India (NHAI) are another key advantage. Under this model, the NHAI pays interest on reducing balances at a rate higher than the Reserve Bank of India's Bank Rate, offering protection against interest rate fluctuations and ensuring financial stability.
The Capital Infra Trust InvIT IPO marks a significant opportunity for investors to become part of India's infrastructure growth story. By leveraging its revenue-generating road projects and strategic financial planning, the trust is well-equipped to deliver long-term value. With strong institutional backing and planned stock exchange listings, the trust offers both stability and accessibility for a diverse range of investors. As infrastructure development continues to play a central role in India's economic ambitions, this IPO aligns perfectly with the country's broader growth trajectory.
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