Bharat Highways INVIT IPO Subscribed 3.12 times

About the Bharat Highways Infrastructure Investment Trust INVIT IPO

Bharat Highways INVIT IPO will be open from February 28th, 2024 to March 01st, 2024; both days inclusive. The IPO of Bharat Highways Infrastructure Investment Trust INVIT has a book building price band in the range of ₹98 to ₹100 per share. The IPO of Bharat Highways Infrastructure Investment Trust INVIT will be entirely a fresh issue of shares. The fresh issue tends to bring in fresh funds into the company, but is also EPS and equity dilutive. On the other hand, OFS is just a transfer of ownership. The fresh issue portion of the IPO of Bharat Highways Infrastructure Investment Trust INVIT comprises the issue of 25,00,00,000 shares (2,500 lakh shares approximately), which at the upper price band of ₹100 per share will translate into a fresh issue size of ₹2,500 crore.

This also doubles up as the overall size of the IPO, since there is no offer for sale component in the IPO. Thus, overall IPO of Bharat Highways INVIT IPO will comprise of the issue of 25,00,00,000 shares (2,500 lakh shares approximately) which at the upper end of the price band of ₹100 per share aggregates to total issue size of ₹2,500 crore. The IPO of Bharat Highways Infrastructure Investment Trust INVIT will be listed on the NSE and the BSE on the IPO mainboard. The fresh funds will be used to provide loans for Project SPVs for repayment and pre-payment of their outstanding loans, including accrued interest. Part of the fund will also be used for general corporate purposes. The IPO will be lead managed by ICICI Securities Ltd, Axis Bank Ltd, HDFC Bank Ltd and IIFL Securities Ltd; while KFIN Technologies Ltd will be the registrar to the IPO.

Read more about Bharat Highways INVIT IPO

How subscriptions evolved in the Bharat Highways INVIT IPO period?

The IPO being an INVIT IPO was only open for the HNI / NII subscribes and the QIB subscribers and the IPO was not allowed to be open for the retail investors. At the close of the third day of subscription, the IPO of Bharat Highways Infrastructure Investment Trust INVIT was subscribed 3.12 times as per data made available on the NSE at the close of the third and final day of the IPO. There was no retail portion to the IPO and the subscription was only open for the HNI portion and the QIB portion. The table below gives the break up of subscription across categories and sub categories. This is the data as of the close of subscription on the evening of 01st March 2024.

Data Source: NSE

Here are some key takeaways from the above table.

• The QIB portion overall was tepid, but saw interest from the global FPIs and also from the domestic mutual funds. The QIB portion was subscribed 2.32 times. On the QIB front, against the 5.62 crore units available in the offer, there was institutional interest to subscribe in units to the tune of 13.06 crore units.
   
• The HNI / NII portion got subscribed 4.07 times. This segment saw a strong response from high Networth individuals and corporates, with most of the buying interest coming in only on the last day of the IPO. The total HNI / NII quota in the IPO was around 4.68 crore units, of which buying interest was visible for 19.05 crore units.
   
• The overall IPO got 3.12 times subscribed at the end of the first day of the IPO. It must be noted here that this is the net number of shares available after the quota for sponsors and the quota for the anchor investors is already completed. The total units available at a net level was 10.30 crore units, of which interest was visible for 32.11 crore units in total.

Understanding the unique anchor methodology for Bharat Highways INVIT IPO

The difference between the gross and net number of shares in the case of INVIT, not only includes the anchor portion, but also the mandatory sponsor allotment portion. For example, under the extant SEBI rules on INVIT, all the INVITs going for an IPO are required to allocate, at least, 15% of the post diluted equity to the sponsors. In this case, the sponsor is Aadarshila Infratech Private Ltd. The company has already allocated on February 26, 2024, a total of 6,64,50,000 shares (664.50 lakh shares) to the sponsor of the INVIT, Aadarshila Infratech Private Ltd. That leaves residual shares of just 18,35,50,000 shares (1,835.50 lakh shares). Out of these shares, 75% is allocated to the QIBs and 25% to the HNI / NII investors. The anchor investors that we will talk about now, has been carved out of this QIB portion of the net issue of 1,835.50 lakh shares. However, these are subject to change and in this case also, some last minute tweaking volumes have been done, which are captured in the table below.

Let us now turn to the anchor issue of the IPO of The anchor issue of Bharat Highways Infrastructure Investment Trust INVIT on February 27th, 2024. Bharat Highways Infrastructure Investment Trust INVIT saw a strong response on 27th February 2024 with 45% of the net IPO size (net of sponsor allocation) getting absorbed by the anchors. Out of the residual shares (post sponsor allotment) of 18,35,50,000 shares (1,835.50 lakh shares) on offer, the anchors picked up 8,25,97,350 shares (825.97 lakh shares approximately) accounting for 45% of the net IPO size.

The entire anchor allocation was made at the upper price band of ₹100 per share. Post the anchor allocation, here is how the overall allocation looked.

Data Source: NSE

The anchor allocation is slightly more convoluted in an INVIT. Earlier, we had said that the anchor allocation of 8,25,97,350 shares was 45% of the net IPO size (net of sponsor allocation of units). However, as a share of the overall IPO size of 2,520.60 crore shares (later modified), the anchor portion is 32.77%, which is captured in the above table. Hence the discrepancy. These 8,25,97,350 shares issued to the anchor investors on 27th February 2024, were actually reduced from the original QIB quota; and only the residual amount would be available to QIBs in the IPO. That change has been reflected in the table above, with the QIB IPO portion reduced to the extent of the anchor allocation. As a result, the QIB quota has reduced from 55.06% of the overall IPO before the anchor allocation to 22.29% after the anchor allocation. The original size of the Bharat Highways INVIT IPO was 25 crore shares, but the final tally took it up to 25.21 crore shares. The difference is quite marginal.

Key dates for Bharat Highways Infrastructure Investment Trust INVIT IPO

The issue opened for subscription on 28th February 2024 and closed for subscription on 01st March 2024 (both days inclusive). The basis of allotment will be finalized on 04th March 2024 and the refunds will be initiated on 05th March 2024. In addition, the demat credits are expected to also happen on 05th March 2024 and the stock will list on 06th March 2024 on the NSE and the BSE. Bharat Highways Infrastructure Investment Trust INVIT will test the appetite for such hospitality stocks in India. The credits to the demat account to the extent of shares allotted will happen by the close of 05th March 2024 under ISIN (INE0NHL23019).