Capital Infra Trust (formerly National Infrastructure Trust), an InvIT sponsored by Gawar Construction, concluded its IPO on January 9th, 2025, at a price range of ₹99-100 per unit. The ₹1,578 crore IPO comprised ₹1,077 crore in fresh issuance and a ₹501 crore offer for sale (OFS) by Gawar Construction. The IPO witnessed a 78% subscription rate by the end of the bidding process, with the portion allocated to other investors being 1.67 times subscribed, while the institutional investor segment garnered only 4% subscription. Anchor investors contributed ₹703 crore.

Gawar Construction, specializing in road and highway projects across India, is the sponsor. The funds raised will primarily be used to repay external debts and unsecured loans, enhancing project funding capabilities. A brokerage firm recommended a ‘SUBSCRIBE’ rating, citing the positive growth in India’s infrastructure sector, particularly in roads and highways, driven by government investment and public-private partnerships (PPPs). Gawar Construction’s strong track record further bolsters this recommendation. However, the brokerage also highlighted potential risks, including asset overvaluation, delays in annuity payments, rising interest rates, and operational challenges. The absence of a Net Asset Value (NAV) for valuation poses another risk.

The grey market premium (GMP) for Capital Infra Trust InvIT stood at ₹0 on the last day of trading, indicating that shares were trading at the issue price of ₹100, with no premium or discount. According to investorgain.com, this trend, observed over the past nine sessions, is expected to continue until listing. This lack of premium reflects current market sentiment and may change post-listing.

Despite the positive outlook for India’s infrastructure sector, potential investors should carefully consider the associated risks before investing. Factors such as asset valuations, interest rate fluctuations, and potential delays in government payments warrant close monitoring. The absence of an NAV adds another layer of complexity to valuation. Long-term investors with a higher risk tolerance may find this investment appealing, considering the growth potential within India’s infrastructure space.