The Rs 130 crore Highway Infrastructure IPO has hit the markets today, August 5 and so far, it is drawing far more attention than its size would suggest. With a grey market premium (GMP) hovering around 57%, many investors are suddenly sitting up and taking notice.
But is it all hype, or is there something under the hood that is driving this interest?
Here are five things to know before jumping into the frenzy.
Highway Infrastructure IPO: Small IPO, Big start – 7x subscribed on Day 1 so far
Despite being a relatively modest public issue, the IPO was subscribed 7.01 times overall so far on its day 1 of bidding. The retail portion saw the most heat, booked 9.16 times, while non-institutional investors (NIIs) came in at 6.51 times.
QIB interest was more muted, at under 1x so far.
Highway Infrastructure IPO: Grey Market buzz
On the Day 1 of its bidding itself, the unofficial grey market price has spiked. As per the latest update, Highway Infrastructure’s unlisted shares were trading between Rs 110 in the grey market. This indicates a 57% premium over the upper price band of Rs 70.
While it is important to note that GMP does not guarantee listing performance and changes as per market sentiment.
Highway Infrastructure IPO: Here is what the IPO is offering
The IPO includes both a fresh issue of Rs 97.52 crore and an offer-for-sale worth Rs 32.48 crore from the promoters. The company plans to utilise Rs 65 crore from the fresh issue for working capital needs and allocate the rest toward general corporate purposes.
The issue will remain open for bidding from August 5 to August 7, with allotment likely to be finalised by August 8. Thereafter, the listing is scheduled for August 12.
Investors can apply for a minimum lot of 211 shares, which requires an investment of Rs 14,770.
Highway Infrastructure IPO: Anchor Investors
A day before the IPO opened, Rs 23.4 crore was raised via anchor placement. Key participants included HDFC Bank, Abans Finance, Sunrise Investment Opportunities Fund, and VPK Global Ventures Fund.
VPK was the largest investor in the anchor round, picking up nearly 12 lakh shares worth Rs 8.4 crore, while the others invested Rs 5 crore each.
Highway Infrastructure IPO: What do analysts say?
Brokerage house Anand Rathi has issued a “Subscribe – Long Term” recommendation.
The brokerage in its report noted, “At the upper price band, the company is valued at a FY25 P/E of 22.5x, with a post-issue market capitalization of Rs 5,020 million. It presents a niche opportunity in India’s tollway and EPC infrastructure space, supported by consistent growth and a robust order book. The use of ANPR (Automatic Number Plate Recognition) technology in toll systems provides a competitive advantage, while the combination of toll and EPC businesses offers diversified revenue streams. Considering these factors, the IPO seems fully priced, and a “SUBSCRIBE – LONG TERM” recommendation is suggested.”
“On the financial performance front, for the last three fiscals, the company has (On a consolidated basis) posted a total income/net profit, of Rs 456.83 cr/ Rs 13.80 cr (FY23), Rs 576.58 cr/ Rs 21.41 cr (FY24), Rs 504.48 cr/ Rs 22.40 cr (FY25). If we attribute FY25 annualized earnings then the asking price is at a P/E of 22.44. Based on FY24 earnings, the P/E stands at 23.41,” said Bajaj Broking its IPO note.