Capital Infra Trust IPO invites bids: Analysts weigh on long-term prospects

Capital Infra Trust IPO opens today: The initial public offering (IPO) of Capital Infra Trust InvIT opens for public subscription today, Tuesday, January 7, 2025. At the upper end, the company seeks to raise Rs 1,578 crore from the offering. The company has already raised Rs 710.10 crore from anchor investors in the bidding concluded on January 6, 2025.

 

Capital Infra Trust IPO is available at a price band of Rs 99-100 per share, and a lot size of 150 shares. Accordingly, investors can bid for a minimum of 150 shares and in multiples thereof. A retail investor would require a minimum of Rs 15,000 to bid for one lot of 150 shares, and Rs 1,95,000 to bid for a maximum of 13 lots of 1,950 equity shares.

 

Meanwhile, the unlisted shares of Capital Infra Trust traded flat on Tuesday, January 7, 2025, revealed sources tracking grey market activities. Thus, the grey market premium (GMP) of Capital Infra Trust remained at nil as of January 7. 

 

The subscription window to bid for the Capital Infra Trust IPO is slated to close on Thursday, January 9, 2025. Following that, the basis of the allotment of Capital Infra Trust IPO shares is likely to be finalised tentatively on Friday, January 10, 2025, and the company's shares will be credited into the demat account on Monday, January 13, 2025.

 

Shares of Capital Infra Trust are slated to list on the BSE and the National Stock Exchange (NSE) on Tuesday, January 14, 2025.

 

KFin Technologies serves as the registrar for the Capital Infra Trust IPO. The book-running lead managers include SBI Capital Markets and HDFC Bank.

 

Capital Infra Trust stated in its Red Herring Prospectus (RHP) that it will not receive any proceeds from the offer for sale, as these will go directly to the Sponsor Selling Unitholders after deducting offer-related expenses. However, the trust plans to utilise the proceeds from the fresh issue to provide loans to its Project Special Purpose Vehicles (SPVs) for two purposes: (1) repayment or pre-payment of external borrowings, and (2) repayment of unsecured loans availed from the sponsor.

 

Should you Subscribe to Capital Infra Trust IPO?

 

Canara Bank Securities - Subscribe for long-term

Analysts at Canara Bank Securities have recommended subscribing to the public offering for the long term for risk-taking investors, given the absence of Net Asset Value (NAV) to assess the company’s valuation. "Gawar Developer’s robust project pipeline and proven track record enhance the InvIT’s value proposition. However, potential risks include asset overvaluation, delays in annuity payments, rising interest rates, and operational challenges," wrote the analysts in a research note. The InvIT’s stable income and strong growth potential, analysts said, make it an attractive option for long-term institutional investors. Investors should carefully monitor asset valuations, interest rate fluctuations, and government payment delays. "Overall, the model presents a promising investment opportunity within India’s infrastructure sector."

 

Bajaj Broking - Subscribe for long-term

Bajaj Broking, in its research report, has recommended subscribing to the IPO with a long-term perspective. According to the brokerage, this scheme is suitable for well-informed investors seeking long-term rewards. It offers dividend distribution, partial redemption, and capital appreciation in the long run. However, the brokerage cautioned that "the Trust is a newly settled trust and does not have an established operating history, which will make it difficult to accurately assess future growth prospects."

 

About Capital Infra Trust

Capital Infra Trust (erstwhile National Infrastructure Trust) is an infrastructure investment trust sponsored by Gawar Construction (GCL). The trust was established in September 2023 with the objective to carry on the activities of, and to make investments as, an infrastructure investment trust. It has 9 completed and revenue-generating initial portfolio assets aggregating to 682.43 km. In addition to this, the trust will also have the right to acquire new projects through a right of first offer (ROFO) with its sponsor. Its sponsor, GCL, is an infrastructure development and construction company with over 15 years of experience, primarily engaged in the construction of road and highway projects across 19 states in India.