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IPO Details:

• IPO opening date: August 5, 2025
• IPO closing date: August 7, 2025
• IPO size: ₹130.00 crores
• Fresh issue: ₹97.52 crores (approximately 13,931,428 equity shares at upper cap)
• Offer for sale (OFS): ₹32.48 crores (4,640,000 equity shares at upper cap)
• IPO price band: ₹65 – ₹70 per equity share of ₹5 each
• Minimum bid lot: 211 shares
• Allocation for investors: Not more than 30% for Qualified Institutional Buyers (QIBs), not less than 30% for High Net-worth Individuals (HNIs, also known as Non-Institutional Investors – NIIs), and not less than 40% for Retail investors
• Lead Manager: Pantomath Capital Advisors Pvt. Ltd.
• Registrar: Bigshare Services Pvt. Ltd.

About the Company:

• History: Highway Infrastructure Ltd. (HIL) was initially formed as a partnership firm named ‘M/s Highway Enterprises’ in 1995. It was converted into a private limited company, ‘Highway Infrastructure Private Limited,’ on February 10, 2006, and then to a public limited company, ‘Highway Infrastructure Limited,’ on May 4, 2018.
• Main products/services: The company is primarily engaged in infrastructure development and management, with its main businesses being tollway collection, Engineering, Procurement, and Construction (EPC) infrastructure, and real estate. Tollway collection is the priority segment, followed by EPC and Real Estate.
• Sales & manufacturing units: HIL currently executes projects in Indore, Bhopal, Dhar, Ratlam, and Khandwa in Madhya Pradesh, India. It has experience across various infrastructure projects like roads, bridges, tanks, irrigation, and civil buildings, serving both private and public sectors. The company has operated toll collection centers in 11 states and one union territory, including prominent expressways like Delhi-Meerut Expressway.
• Employees: As of May 31, 2025, HIL had 364 employees on its payroll, and as of August 31, 2024, it employed 398 individuals.
• Promoters: The company’s promoters are Arun Kumar Jain, Anoop Agrawal, and Riddharth Jain.
• Branches/network: The company has executed projects in Madhya Pradesh, Gujarat, Andhra Pradesh, Punjab, Maharashtra, Telangana, Chhattisgarh, Haryana, Uttar Pradesh, Rajasthan, and Delhi.

Financials:

Highway Infrastructure Ltd. Financial Information (Restated Consolidated) (Amount in ₹ Crore)

Post IPO Market cap: ₹502.04 cr Market cap/sales (FY25): 1.01x P/E FY24: 23.41 times P/E FY25 22.44 times

The company has shown growth in its net profits for the reported periods, but experienced a setback in its top line for FY25. The quantum jump in net profit from FY24 to FY25 may need a close look.

Salient points:

• Use of funds: The net proceeds from the fresh issue, amounting to ₹97.52 crores, will be primarily utilized for funding working capital requirements (₹65.00 crores) and the rest for general corporate purposes.
• Business scenario: India’s road infrastructure is expanding, with projections for increased tolling network and higher revenues, supported by government initiatives like Vision 2047 and Bharatmala Pariyojana.
• Business operations: HIL operates and manages tollway collection systems and executes EPC projects, managing projects from conceptualization to completion. The company uses Automatic Number Plate Recognition (ANPR) technology for toll collection on the Delhi-Meerut Expressway and employs Electronic Toll Collection (ETC) systems with RFID tags for seamless payments.
• Revenue Model: In FY25, 77.1% of revenue came from tollway collection, 21.3% from EPC Infra, and 1.6% from Real Estate. Toll collection is a lower margin business compared to pure EPC companies.
• Business strategy: HIL aims to strengthen its tollway collection and EPC Infra businesses, improve financial performance, expand into additional states to reduce geographic concentration risk, and explore complementary business areas like wayside amenities development.
• Risks: Significant revenue reliance on tollway collection and EPC Infra projects from NHAI and public sector customers poses a risk if contracts are lost. The business is concentrated in specific parts of India. Toll contracts are typically for a standard one-year period with limited extension scope. The business is capital-driven, and insufficient cash flows could adversely affect operations.
• Litigations: As of the Red Herring Prospectus date, there is one criminal proceeding involving the company’s subsidiary, Highway & Tandon Tollways Private Limited, related to non-compliance under the Contract Labour (Regulation and Abolition) Act, 1970. There is also one tax proceeding and three material civil litigations involving the company.
• Revenue split by region (FY25): Madhya Pradesh (33.39%), Gujarat (15.21%), Maharashtra (14.37%), Haryana (10.90%), Punjab (3.36%), Andhra Pradesh (0.14%).
• Export/import: The provided sources do not contain information on export/import activities.
• Revenue split by product or service (FY25): Tollway collection (77.14%), EPC Infra (21.28%), Real Estate (1.58%).
• Capacity utilisation: Information on capacity utilization is not explicitly provided.
• Expansion: The company intends to participate in bidding for upcoming road infrastructure projects to expand its order book and revenue base. It also aims to expand its footprint into additional states.
• Strategies: The company focuses on strengthening existing business verticals, penetrating new geographies, and exploring associated business verticals like wayside amenities development. It leverages its experience with ANPR technology and ETC systems for efficient toll operations.
• Orders: As of May 31, 2025, the consolidated Order Book was ₹666.31 crore, with ₹59.53 crore in tollway collection and ₹606.78 crore in EPC Infra business. The EPC projects represent a book-to-bill of 5.7x based on FY25 EPC revenue.
• Clients: HIL caters to both private and public sectors, having completed projects for public sector entities and private companies like Shubham City Homes.
• Working capital & inventory days: The company’s working capital position deteriorated in FY25, with working capital days rising to 66 days from 41 days in FY24. In FY25, inventory days were 202.
• CAGR profits/Margins last 3 years (FY23-FY25): Revenue CAGR was 4.36%, EBITDA CAGR was 6.36%, and Profit After Tax (PAT) CAGR was 27.4%.

Peers:

Opinion:

I intend to skip this IPO. The valuations are in line with larger peers offering no incentive. Heavy subscription expected due to small issue size.

Post IPO equity capital: ₹35.86 crore P/E for FY24: 23.41 times P/E FY25 (annualized): 22.44 times

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• 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.