Industrial Overview:

The development of the infrastructure sector has been a priority area for the Government and has witnessed enhanced public investment over the years. The infrastructure sector comprises roads, railways, power, ports, telecommunication, and civil aviation among others. India has the second-largest road network in the world, spanning a total of 6.33 million km. In the Union Budget for Fiscal Year 2024-25, a total of approximately ₹2.8 trillion has been budgeted for the MoRTH (Ministry of Road Transport & Highways)

IPO Objective:

The Issue Proceeds (including the Sponsor Contribution) will be ₹25,000 million. The Net Proceeds will be utilized for: 

a) Providing loans to the Project SPVs for repayment/ prepayment, of their respective outstanding loans. 

b) General purposes.

Financials:

● Fall in revenue - Total revenue has declined by 26% in March 2022 from March 2021 and down by 4% in March 2023. The revenue numbers for six months ended as of September 2023 are also down. 

● Volatility in Profitability- PAT has grown significantly from 2021 to 2023 however, PAT for September 2023 has again fallen. 

● Rise in Assets and Indebtedness - The Balance Sheet shows the rising value of assets with the subsequent rise in borrowings too.

Risks:

● The InvIT is a newly settled trust and does not have an established operating history, which will make it difficult to accurately assess the future growth prospects 

● Failure and inability to identify and acquire new infrastructure assets that generate comparable revenue, profits, or cash flows may have an adverse effect on the business, financial condition, cash flows and results of operations, and their ability to make distributions 

● All of the company’s revenue from InvIT Assets is dependent on receiving consistent annuity income from NHAI 

● If they fail to maintain the roads constructed by them pursuant to and as per the relevant contractual requirements, they may be subject to penalties or even termination of contracts, which may have a material adverse effect on the reputation, business, financial condition, results of operations, and cash flows.

IPO details: