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Anantam Highways Trust, backed by Alpha Alternatives, is raising INR 400 crores through an IPO to strengthen its INR 5,000-crore portfolio of road assets. The trust currently owns seven hybrid annuity model road projects built by Dilip Buildcon with 13 years of concession life left. With a right-of-first-offer agreement for 11 additional projects, assets from the Build India Infrastructure Fund worth INR 4,500 crores, and potential third-party deals, the trust has clear expansion prospects. IPO proceeds will be used for deleveraging, lowering its leverage ratio to 42 percent.
Anantam Highways Trust, an infrastructure investment trust sponsored by Alpha Alternatives, is launching a INR 400-crore initial public offering aimed at growing its INR 5,000-crore road portfolio. The trust already holds seven hybrid annuity model (HAM) road projects built by Dilip Buildcon. These projects, with an average remaining concession period of 13 years, provide predictable and long-term cash flows. Advertisement
The trust has secured a right-of-first-offer (ROFO) agreement covering 11 road assets, which ensures a steady pipeline for expansion. In addition, it expects to receive assets from Alpha Alternatives' Build India Infrastructure Fund, which manages INR 4,500 crores in assets under management. Management has also kept the option open for third-party acquisitions, further widening the scope of additions.
Proceeds from the IPO are set aside mainly for reducing debt. Once the issue is completed, the leverage ratio is expected to fall to 42 percent, improving financial flexibility. The trust has stated that this will allow it to take on new acquisitions while maintaining an optimum capital structure. Management also highlighted that it intends to optimise leverage to strike a balance between predictable returns and future growth opportunities.
For expansion, the trust may use a combination of sponsor support and fresh investor capital. Both Dilip Buildcon and the Build India Infrastructure Fund are willing to transfer assets into the InvIT in exchange for units. This structure enables the trust to expand without relying heavily on new equity infusions from external investors. It also provides flexibility to issue new units or raise capital at the InvIT level when required.
InvITs have steadily gained traction in India. Their assets under management rose to USD 73.3 billion in the last financial year from USD 37.4 billion five years earlier. Over this period, InvITs raised USD 15.8 billion, highlighting strong investor interest, according to Knight Frank India. The outlook is further supported by national policy initiatives.
The IPO opened last week and will close shortly. The price band has been fixed between INR 98 and INR 100 per unit. At the top end of the price band, the InvIT is valued at about INR 2,174 crores.
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