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Capital Infra Trust (Erstwhile National Infrastructure Trust), road focused, infrastructure investment trust sponsored by Gawar Construction Ltd. Capital Infra Trust Invit is a book built issue of Rs 1,578.00 crores. The issue is a combination of fresh issue aggregating to Rs 1,077.00 crores and offer for sale aggregating to Rs 501.00 crores.

IPO details

About Infrastructure Investment Trusts(InvIT)

Infrastructure Investment Trusts(InvIT)  are quasi debt instruments, akin to mutual funds which are regulated  by SEBI  to enable investments into the infra sector by pooling together money from several individual investors for direct investment in infrastructure . In contrast to earlier methods like Infrastructure Bonds, these instruments provide a means for direct investment by individual investors in infrastructure mainly in revenue generating or completed projects. In the process they aim to return a portion of the income, after meeting expenses to unit holders of InvITs. This framework enables infrastructure developers to monetize completed assets.

About Capital Infra Trust Invit

• Capital Infra Trust InvIT is an infrastructure investment trust established on September 25, 2023, under the Indian Trusts Act, 1882, and regulated by SEBI’s Infrastructure Investment Trusts Regulations. Sponsored by Gawar Construction Limited, the trust focuses on acquiring, managing, and investing in a diversified portfolio of road assets across India.
• Since 2008, the Sponsor has undertaken more than 100 road construction projects. The Sponsor had a portfolio of 26 road projects on a hybrid annuity mode with NHAI, of which 11 are completed projects, including the five acquired assets which Sadbhav Infrastructure Project Limited erstwhile owned, and 15 under-construction projects.
• Capital Infra Trust InvIT initial Portfolio Comprises nine completed and revenue-generating road assets totaling approximately 682.43 km.

BharatCapital Infra Trust Invit: Financials

The revenue from operations of the SPV Group for the financial year ended March 2023 was at Rs 1,537 crore, down marginally from Rs 1,600 crore a year earlier. 

Bharat Highways InvIT earned a net profit of Rs. 101.4 crores on a total income of Rs. 388.5 crores in H1FY24 and the financial indebtedness of the trust as of February 01, 2024 stood at Rs. 3,568.2 crores.

Capital Infra Trust Invit: anchor issue

• Total Amount Raised from Anchor Investors: ₹703 crore
• Price per Unit for Anchor Allocation: ₹99 (lower end of the price band)
• Anchor Subscription Percentage: 45% of the total IPO size
• The anchor book included participation from 27 institutional investors, with significant allocations from:
  • HDFC Life Insurance Company Limited: 16.06%
  • SBI Life Insurance Company: 14.22%
  • QUANT Mutual Fund: 14.22% (across two schemes)
  • NPS Trust (SBI Pension Fund schemes): 14.23%
  • HDFC Mutual Fund: 10.70% (across two schemes)

Salient Points & Assessment: Capital Infra Trust Invit

• All of the InvIT assets ( seven road projects) are HAM projects awarded by NHAI and its revenue stream is primarily through annuity payments from the NHAI.
• portfolio consists of nine completed and revenue-generating road assets, all operating under the Hybrid Annuity Model (HAM) and managed by Special Purpose Vehicles (SPVs) under concessions granted by the National Highways Authority of India (NHAI) 1
• Total Length: Approximately 682.43 km
• Average Residual Concession Life: Approximately 11.7 years as of September 30, 2024.

• The HAM combines the features of EPC and BOT (Build, Operate, and Transfer) models. Under this model, the concessionaire receives 40% of the project cost from the authority during the construction period. The concessionaire is responsible for designing, building, financing (60% of the total project cost), operating and transferring the project.
• Under HAM model, the toll is collected by the authorities. The amount financed by the concessionaire is to be recovered from the authority through semi-annual payments.
• The InvIT is a newly settled trust and does not have an established operating history, which makes it difficult to accurately assess future growth prospects and possible income distributions.
• In terms of the SEBI InvIT Regulations, the Project SPVs shall distribute not less than 90% of the net distributable cash flows to the InvIT, proportionate to the InvIT’s holding in the Project SPVs.
• Peers: Bharat Highways InvIT, IRB Invit
• Capital Infra Trust InvIT IPOs informally guided for DOUBLE DIGIT distribution per unit (DPU). we can assume 10-12 Rs.. P.A. which could be half yearly or even in quarterly installments.
• There will be some taxfree component, but quantum has been disclosed by the Trust.
• I intend to apply in Capital Infra Trust Invit in small quantity subject to funds in my hand. As with otherb Invits it may provide returns slightly better than fixed deposit etc. and also In and is more Tax efficient. This is more in class of Debt or Quasi Debt instrument. However their is overhang of poor IRB Invit listing (many years back) but has stablized now. The last Bharat Highways InvIT IPO  saw 4-5% uptick on listing and quotes around Rs. 112-113.
• GMP : Nil
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.