Bharat Highways InvIT IPO Financial Analysis

Bharat Highways InvIT IPO Financial Analysis
Bharat Highways InvIT IPO Financial Analysis

by Tanushree Jaiswal Last Updated: Feb 27, 2024 - 10:49 am 1.1k Views
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Bharat Highways Infrastructure Investment Trust is an investment trust focused on infrastructure assets in India. Managed by SEBI it acquires, manages, and invests in various infrastructure projects. It operates as a pass through vehicle allowing investors to benefit from the income generated by these assets. Bharat Highways Infrastructure Investment Processing is set to launch its IPO on 28 February 2024. Below is a summary of the company's business model, strengths, risks, and financials to assist investors in making informed decisions.

Bharat Highways InvIT IPO Overview

Bharat Highways InvIT is a trust that handles various infrastructure assets across India. It was established to acquire, manage, and invest in a portfolio of infrastructure assets particularly roads across the country. The trust operates on a hybrid annuity model (HAM), which involves fixed and variable payments based on project performance.

BH InvIT's portfolio consists of seven roads in various states including Punjab, Andhra Pradesh, Gujarat, Maharashtra and Uttar Pradesh. These roads are managed and kept in good condition under permission granted by the National Highways Authority of India. The trust has received high credit ratings from reputable agencies such as CRISIL, CARE, and India Ratings and Research.

Get more details about Bharat Highways InvIT IPO in this article.

Bharat Highways InvIT Strengths

  1. Bharat Highways InvIT owns stable profitable assets with predictable long-term cash flows and no construction risk.
  2. Bharat Highways InvIT has a diverse portfolio of roads spread across different regions ensuring a stable income stream.
  3. Promising industry with solid fundamentals and government support.
  4. Bharat Highways InvIT has a strong history of managing and maintaining road projects in India.

Bharat Highways InvIT Risk

  1. The InvIT's revenue depends on receiving regular annuity income from NHAI for its infrastructure assets. Any decrease or non receipt of this income could hurt distributions to unitholders.
  2. Failing to acquire new assets that generate similar revenue could harm the business, finances, and distribution capability.
  3. Depending on third parties for operating and maintaining InvIT assets poses risks of delays, defaults, or unsatisfactory performance which can impact effective operation.
  4. Regular maintenance is essential for INVIT assets. Failure to meet standards can result in penalties or contract termination.

Bharat Highways InvIT IPO Details

Bharat Highways Infrastructure Investment Trust IPO is scheduled from February 28 to March 1, 2024. The price band for the IPO has been set at ₹98 to ₹100 per share.

Total IPO size (₹Cr) 2,500.00
Offer for sale (₹Cr) 0.00
Fresh issue (₹Cr) 2,500.00
Price band (₹) 98-100
Subscription dates 28 Feb 2024 to 1 March 2024

Financial Performance of Bharat Highways InvIT IPO

Bharat Highways Infrastructure Investment Trust (InvIT) recorded a Profit After Tax of ₹149.45 crores on 31 March 2021. However, this figure decreased to ₹62.87 crores on 31 March 2022 there was an increase in the PAT to ₹527.05 crores by 31 March 2023. This data indicates fluctuations in the trust's profitability over the last three years with a notable increase in profits between 2022 to 2023.

Period 31 Dec 2023 31 Mar 2022 31 Mar 2022
Assets (₹ Crore ) 6,056.28 5,536.40 4,943.95
Revenue (₹ Crore ) 1,537.47 1,600.18 2,170.39
PAT (₹ Crore ) 527.05 62.87 149.45

Revenue Trends

The company's revenue dropped from ₹21,170.39Cr in 2021 to ₹1,537.47 Cr in 2023 indicating a declining trend. This could raise concerns about its ability to generate revenue and the market conditions impacting its operations.

Debt Equity Ratio

As of 31 March 2021, debt to equity Ratio for the company was 5.14 by 31 March 2022 it increased to 6.16, but then decreased to 3.36 by 31 March 2023. Debt Equity Ratio measures a company's debt relative to its equity. A higher ratio indicates higher financial risk while a lower ratio suggests a healthier balance.

Asset

Total assets have consistently increased reflecting ongoing investment in operational capacity and future growth potential. Although total liabilities have also risen the decrease in the debt to equity ratio from 6.16 in 2022 to 3.36 in 2023 indicates improved financial stability and reduced leverage.

Final Words

This article takes a closer look into Bharat Highways InvIT IPO scheduled for subscription on 28 February 2024. It suggests that potential investors thoroughly review the company's details, financials and subscription status before applying for the IPO.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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