The eagerly awaited IPO of Capital Infra Trust, an infrastructure investment trust (InvIT), has achieved a subscription rate of 39% on its first day of bidding. With this impressive start, Capital Infra Trust has marked its entry as the first InvIT IPO of 2025.
This article explores the key highlights, subscription details, and objectives of the public issue, alongside insights into the sponsor, Gawar Construction.
Key Highlights of Capital Infra Trust IPO
- Subscription Details: The IPO received bids for 3,46,59,300 units against the total offer of 8,83,83,750 units. The retail investor segment and institutional investors have shown considerable interest in the issue, with the latter achieving an 87% subscription rate.
- Issue Size: The IPO is priced between ₹99 and ₹100 per unit, aiming to raise ₹1,578 crore. This includes a fresh issue worth ₹1,077 crore and an offer for sale (OFS) amounting to ₹501 crore by Gawar Construction.
- Anchor Investment: The trust has already secured ₹703 crore from anchor investors, demonstrating strong market confidence in its prospects.
- Closing Date: The IPO bidding period will conclude on January 9, 2025.
Objectives of the IPO
The primary goal of the fresh issue is to provide financial assistance to project-specific special purpose vehicles (SPVs). The funds will be utilized for:
- Debt Repayment: Clearing external borrowings and repaying unsecured loans from the sponsor, Gawar Construction.
- Infrastructure Development: Supporting ongoing and upcoming projects to enhance infrastructure in India.
About Capital Infra Trust
Established in September 2023, Capital Infra Trust operates as an InvIT under SEBI regulations. The trust’s primary aim is to invest in infrastructure projects across India. Its sponsor, Gawar Construction, is a reputed name in the construction industry, specializing in road and highway projects across 19 Indian states. The company collaborates with key government bodies such as the National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways.
What Sets Capital Infra Trust Apart?
Experienced Sponsor
Gawar Construction has an extensive track record in infrastructure development, particularly in roads and highways. Its expertise and strong industry connections lend credibility and stability to the trust.
SEBI-Compliant Operations
Capital Infra Trust adheres to SEBI’s InvIT regulations, ensuring transparency, accountability, and investor protection. This compliance framework makes the trust a reliable investment avenue.
Strategic Focus
The trust is poised to capitalize on India’s growing infrastructure needs, particularly in transportation and urban development. By channeling funds into high-impact projects, it aims to generate sustainable returns for investors.
Financial Overview
- Pricing and Units: The units are attractively priced at ₹99-₹100, making them accessible to a broad investor base.
- Fund Allocation: The proceeds from the IPO will primarily address debt repayment, reducing the financial burden on SPVs and freeing up resources for new projects.
- Listing: The units will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), enhancing liquidity and accessibility for investors.
Market Sentiment and Future Prospects
The strong anchor investment of ₹703 crore indicates robust market confidence in Capital Infra Trust. As India prioritizes infrastructure development, InvITs like Capital Infra Trust are well-positioned to benefit from increased government spending and private sector participation. Investors can anticipate stable returns driven by the trust’s strategic focus and efficient fund utilization.
Conclusion
Capital Infra Trust’s IPO has generated significant interest, with a 39% subscription rate on its opening day. The trust’s focus on infrastructure development, backed by the expertise of Gawar Construction, positions it as a promising investment opportunity. With its SEBI-compliant framework and strategic objectives, Capital Infra Trust is set to play a pivotal role in shaping India’s infrastructure landscape. Investors seeking long-term growth and stable returns should consider this InvIT IPO a viable addition to their portfolio.
FAQs
1. What is the price range for the Capital Infra Trust IPO?
The IPO is priced between ₹99 and ₹100 per unit.
2. When will the IPO close?
The IPO will close on January 9, 2025.
3. What is the total issue size?
The total issue size is ₹1,578 crore, comprising a fresh issue of ₹1,077 crore and an OFS of ₹501 crore.
4. Who is the sponsor of Capital Infra Trust?
The sponsor is Gawar Construction, a leading player in the road and highway construction sector.
5. Where will the units be listed?
The units will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).