Capital Infra Trust, an infrastructure investment trust sponsored by Gawar Construction Limited, is ready to hit the primary markets with an Initial Public Offering to raise ₹1,578 crore. Its IPO will be open for subscription from January 7, 2025, to January 9, 2025.
Established in September 2023, Capital Infra Trust specializes in infrastructure investment, development, and management, especially road and highway projects across India. This is a chance for investors to become equity holders of well-established road assets with the possibility of generating revenue over long periods.
Capital Infra Trust IPO Dates
The timeline for the Capital Infra Trust IPO is made in such a way that it goes through a hassle-free process both for the investors and the trust. Here are the important Capital Infra Trust IPO dates:
- IPO Opening Date: January 7, 2025
- IPO Closing Date: January 9, 2025
- Basis of Allotment Finalization: January 10, 2025
- Refunds Initiation: January 13, 2025
- Demat Credit Date: January 13, 2025
- Listing Date: January 14, 2025
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Capital Infra Trust IPO Issue Size
The Capital Infra Trust IPO is set up with an aggregate issue amount of ₹1,578 crores in two parts:
- Fresh Issue: ₹1,077 crores
- Offer for Sale (OFS): ₹501 crores
Capital Infra Trust IPO Proceeds Usage
Proceeds from the IPO are for the strengthening of the financial health of the trust with the aim that it operates in an efficient manner. The purpose of this IPO includes:
1. Repayment of borrowings:
A major chunk of the fresh issue proceeds would be utilized in settling or paying off outstanding loans of the project SPVs over the trust, which would lower the debt burden and increase the financial flexibility of the SPVs.
2. Loan to SPVs:
From these funds, the trust will advance loans to SPVs. In that way, such loans will, therefore, make the entities healthy financially, so that they would have sufficient wherewithal for the maintenance and operation of infrastructural projects effectively.
3. General Corporate Purposes
A portion of the proceeds will be earmarked to accommodate corporate expenditures and for establishing a provision of working capital requirements. The process is directed towards making operations for the smooth running of the trust’s administrative and operational activities.
Capital Infra Trust IPO Reservation Details
Capital Infra Trust IPO has been primarily planned for institutional and non-institutional investors, as it belongs to the category of InvIT. The proportion for the various categories is as mentioned below:
Qualified Institutional Buyers (QIBs): Not more than 75% of the offer
- In the majority share, the allocations were given to institutional investors-which include mutual funds, banks, and many more financial institutions-in order to guarantee full robust participation from known market players.
Non-Institutional Investors (NIIs): Not less than 25% of the offer
- This category includes high-net-worth individuals (HNIs) and corporate investors.
Retail Investors:
- As per SEBI’s regulations for InvITs, no specific quota is reserved for retail investors. However, retail investors can still participate by investing in a minimum lot size, making this an attractive option for long-term infrastructure-focused investments.
Capital Infra Trust IPO Lot Size
The minimum lot size is 150 units, making the minimum investment amount ₹15,000. Below is the complete breakdown of the Capital Infra Trust IPO lot size investment scale:
| Investor Category | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 150 | ₹15,000 |
| Retail (Max) | 13 | 1950 | ₹1,95,000 |
| S-HNI (Min) | 14 | 2100 | ₹2,10,000 |
| S-HNI (Max) | 66 | 9900 | ₹9,90,000 |
| B-HNI (Min) | 67 | 10050 | ₹10,05,000 |
Capital Infra Trust IPO Promoter Holdings
Capital Infra Trust is promoted by Gawar Construction Limited, a leading infrastructure development company. The Capital Infra Trust IPO shareholder quota details are as follows:
- Promoter Holding Pre-IPO: 100%
- Promoter Holding Post-IPO: 62.5% (approx. calculated on the basis of the offer size).
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
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Capital Infra Trust IPO Details: Company Overview
Capital Infra Trust is an Infrastructure Investment Trust (InvIT) focused on owning, operating, and maintaining a diversified portfolio of road and highway projects across India. It was incorporated in 2023. Capital Infra Trust, being sponsored by the reputed Gawar Construction Limited with more than 15 years of experience in infrastructure development, taps into its sponsor’s experience for efficient execution and management of the projects. Currently, it has a portfolio of nine operational projects amounting to 682.425 kilometres spread over seven states.
The hybrid annuity model (HAM) ensures that the project operates steadily and with predictable income, given the annuity payments it receives from NHAI, minimizing the financial risks associated with them. The trust’s business enjoys some key strengths: first, the sponsor of this trust has long experience with the infrastructure sector.
Its projects yield predictable revenues, and under the HAM model, projects are entered with long-term contracts, which reduces the level of revenue volatility.
Lastly, the diversified portfolio across multiple states allows for diversifying location-specific risk, thus creating balance in the portfolio of different regional economies. So, all together, stable cash flows, efficiency in operation, and diversification bring Capital Infra Trust into investment portfolios as attractive investment vehicles that institutional and non-institutional investors pursue, seeking stable returns from infrastructure assets. By targeting the well-kept, functional assets with the low financial risk, Capital Infra Trust presents a strong case as India’s developing infrastructure sector takes hold.
Capital Infra Trust IPO Financial Performance
Financial performance of Capital Infra Trust InvIT are:
| Particulars | 30 Sep 2024 | 31 Mar 2024 | 31 Mar 2023 | YoY Change (%) |
|---|---|---|---|---|
| Revenue (₹ Cr) | 792.27 | 1543.51 | 2518.92 | -38.73% |
| Profit After Tax (₹ Cr) | 115.43 | 125.77 | 497.19 | -74.71% |
| Total Assets (₹ Cr) | 4905.26 | 4724.07 | 4283.33 | +10.30% |
Financial Performance Analysis
- Revenue Decline: A huge decline in revenue YoY, indicating operational challenges, possibly from the decline in toll collections or delay in government annuity payments.
- Profitability Drop: PAT dropped 74.71% YoY, which raises a red flag due to the rise in operating costs and debt servicing.
- Asset Growth: The growth in total assets (+10.30%) shows the addition of new and existing projects.
Peer Analysis of Capital Infra Trust InvIT
This is a comparison on a peer level by the key financial metrics of similar InvITs and infrastructure companies:
| Company | ROE (%) | EBITDA Margin (%) | PAT Margin (%) | Total Debt/Equity | Market Cap (₹ Cr) | EPS (₹) |
|---|---|---|---|---|---|---|
| India Grid Trust | 31.4 | 60 | 40.3 | 2.5 | 11,895 | 8.77 |
| PowerGrid InvIT | 13.1 | 99 | 11.2 | 0.5 | 7,759 | 11.24 |
| IRB InvIT Fund | N/A | 45 | 8.5 | 3.2 | 3,433 | 5.62 |
| Indus Infra Trust | 16.05 | 55 | 6.5 | 2.8 | 5,027 | 6.85 |
| Capital Infra Trust | 22.5 | 52 | 14.6 | 2.3 | 1,578 | 7.25 |
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- 20 Lac+ unique clients
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Peer Analysis Summary:
- Profitability: Capital Infra Trust InvIT shows a relatively healthy ROE at 22.5%, above Indus Infra Trust and PowerGrid InvIT. However, PowerGrid InvIT leads in EBITDA margin at 99%, which is excellent in terms of operational efficiency. PAT margin of India Grid Trust is significantly higher than its peers.
- Operational Efficiency: PowerGrid InvIT has an EBITDA margin of 99%, which is the highest among all peers and indicates its superior operational efficiency.
- Debt Management: PowerGrid InvIT has the lowest debt-to-equity ratio (0.5), indicating a conservative financial approach. IRB InvIT Fund has the highest ratio (3.2), suggesting higher leverage. Capital Infra Trust maintains a moderate debt-to-equity ratio (2.3).
- Market Valuation: There is a wide range of market capitalization. India Grid Trust has the highest at ₹11,895 Cr, while Capital Infra Trust has the lowest at ₹1,578 Cr, indicating varying levels of investor confidence and market presence.
- Earnings per Share (EPS): PowerGrid InvIT has the highest EPS (₹11.24), followed by India Grid Trust (₹8.77). Capital Infra Trust has a respectable EPS (₹7.25), outperforming IRB InvIT Fund and Indus Infra Trust.
Capital Infra Trust IPO Risk Factors
Investors going for the Capital Infra Trust IPO must take into account the various risk factors surrounding the infrastructure sector and the operating model of the trust. The Capital Infra Trust IPO risk factors are:
- Regulatory Risks: Infrastructure investments are highly exposed to government policies and regulations. Unfavorable changes in policy, tax structures, or requirements of regulatory compliance may negatively affect the cash flows and profitability of the trust.
- Dependence on NHAI: A large part of the income of the trust is received in the form of annuity payments under the Hybrid Annuity Model (HAM) from the National Highways Authority of India (NHAI). This makes the trust vulnerable to concentration risk, as delays or defaults in payments from NHAI can affect the trust.
- Industry Volatility: The industry is capital-intensive and sensitive to macroeconomic shocks. A change in interest rates, inflation, or fiscal policies would affect the cost and returns that are generated from projects.
- Implementation Risks: The elaboration of infrastructure projects often brings forth time-consuming or cost overrun projects, making the project economically not viable enough. Incompetency in implementing a project might make it fail by causing excessive expenses due to uncertainties, creating losses for the trust.
Capital Infra Trust IPO Details: Contact Information
- Address: Capital Infra Trust, Unit No. 1401-1403, 14th Floor, Tower B, SAS Tower, Medicity, Sector-38-Gurugram-122001
- Phone: +0124 4920139
- Email: compliance@capitalinfratrust.com
- Website: www.capitalinfratrust.com
To get more information on the Capital Infra Trust IPO and expert guidance, download the SMC ACE App or visit SMC Telegram channels. Apply for this IPO with SMC Global Securities by opening free demat account to make the best investment choices.
Frequently Asked Questions – FAQs
1. How much is the minimum investment in the Capital Infra Trust IPO?
The minimum investment is ₹15,000 for 150 units.
2. What is the Capital Infra Trust IPO price band?
The price band is ₹99 to ₹100 per unit.
3. When will the Capital Infra Trust IPO be listed on the stock exchange?
The IPO will be listed on January 14, 2025.
References:
https://www.sebi.gov.in/filings/invit-public-issues/dec-2024/capital-infra-trust-formerly-national-infrastructure-trust-_90274.html
SMC Global Securities Research Team
Author: All Content is verified by SMC Global Securities.
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