Highway Infrastructure Makes Solid Market Debut with 67% Premium Over Issue Price

Highway Infrastructure made a strong market debut on August 12, listing at ₹117 on the BSE, a premium of 67% over the issue price of ₹70. The stock touched a 5% upper circuit and was trading at ₹122.84. The IPO was oversubscribed by 300.61 times, driven by QIBs and NIIs. Tollway collection and EPC infra-segment drive the company's revenues and financial performance.

Highway Infrastructure Ltd. (HIL) made a strong market debut on August 12, listing at ₹117 on the BSE, a premium of 67% over the issue price of ₹70. The stock touched a 5% upper circuit and was trading at ₹122.84. The IPO was oversubscribed by 300.61 times, driven by qualified institutional buyers (QIBs) and non-institutional investors (NIIs) [1].

The Rs 130-crore IPO consisted of a fresh issue of 1.39 crore shares aggregating to Rs 97.52 crore and an offer for sale of 46.4 lakh shares amounting to Rs 32.48 crore. The IPO price band was fixed at Rs 65-70 per share. The subscription was overbooked by 447 times for non-institutional investors, 420 times for institutional investors, and 156 times for the retail portion [1].

Highway Infrastructure Ltd. is an infrastructure development and management company engaged in tollway collection, EPC (Engineering, Procurement, and Construction) Infra, and real estate businesses. The company provides a range of services including the operation and management of tollway collection systems, construction of infrastructure projects such as roads, bridges, and civil buildings, and real estate development [3].

The company's core business segments include tollway collection, EPC Infra, and real estate development. The tollway collection segment operates tollways using advanced ANPR and RFID-based ETC systems for contactless toll payments, running toll collection systems across 11 states and 1 Union Territory in India. The EPC Infra segment executes construction projects like roads, bridges, and buildings for both public and private sectors, managing the entire project lifecycle. The real estate segment focuses on commercial and residential properties, developing gated communities and housing projects [3].

The company's market position is bolstered by its technological edge, including the use of ANPR technology on expressways and the integration of FASTag and digital payment systems. The company's revenue from operations grew at a CAGR of 4.36% from Rs 4,551.33 million in FY23 to Rs 4,957.15 million in FY25, while profit increased from Rs 138.00 million in FY23 to Rs 223.98 million in FY25, demonstrating a CAGR of 27.40% [3].

The IPO was a mix of fresh issue and offer for sale, with the net proceeds proposed to be utilized for working capital requirements and general corporate purposes. The company aims to leverage the funds to enhance its operational capabilities and expand its infrastructure projects [3].

Highway Infrastructure Ltd. is led by a team with a rich background in infrastructure development, including managing government projects and executing large-scale infrastructure tasks. The company's experienced management and diversified revenue streams position it as a strong player in the infrastructure sector [3].

The IPO received a solid response from investors, with the issue being fully subscribed within a few hours after opening. The demand was primarily driven by non-institutional investors, followed by retail investors, and the portion booked for QIBs was booked only 3.47 times [2].

In conclusion, Highway Infrastructure Ltd.'s strong market debut reflects investor confidence in the company's growth prospects and financial performance. The IPO's success is a testament to the company's robust business model and strategic positioning in the infrastructure sector.

References:
[1] https://www.ndtvprofit.com/markets/highway-infra-lists-at-premium-over-ipo-price
[2] https://www.business-standard.com/markets/news/highway-infrastructure-ipo-fully-booked-subscription-rises-19x-gmp-at-57-125080500706_1.html
[3] https://investorzone.in/ipo/highway-infrastructure-limited-ipo/