• Bharat Highways InvIT is a specialized trust focused on managing and investing in a diversified portfolio of infrastructure assets across India, primarily roads. GR Infraprojects was the company that constructed the highway projects through its seven SPV’s and now it is transferring it to Bharat Highways InvIT. Now the company will receive annuity from the NHAI on a regular basis so the company has no risk cash flow going forward.
• The company has also provided the estimated Cash flow operations up until FY26. The company will generate Rs 1,016 cr in FY24, Rs 906 cr in FY25, and Rs 940 cr in FY26. after deducting interest and expenses, the company will distribute this as dividend among investors.
• But the concern here is that if we look at another company that went public in 2021 which has massively underperformed the benchmarks despite the market giving substantial returns during this period. The cash flows will keep decreasing as the assets gets depleted. So we believe that this is not a story worth investing in.
• The company has a debt of Rs 3,684 crore. Now the company is going to use Rs 2400 crore out of the Rs 2500 crore issue just to reduce this debt after which it will still have a debt of Rs 1127 crore.

Valuations

• Normally, Invit are valued based on the future cash flows. Here chances of capital appreciations are less and only way one can look forward to have money is dividend which will decline as time progresses due to decline in the cash flow of the company. Hence, we recommend avoiding this IPO.​