Introduction

An Initial Public Offering (IPO) marks a pivotal moment for a company, allowing it to offer shares to the public for the first time and enabling investors to become shareholders. The Grey Market Premium (GMP) serves as an unofficial gauge of investor sentiment, reflecting the price at which shares trade in the grey market before their official listing. It offers a glimpse into potential listing performance, though it’s not a definitive predictor.

Highway Infrastructure Limited, a key player in India’s infrastructure sector, is launching its IPO, and its GMP is drawing significant attention. This comprehensive guide explores the Highway Infrastructure IPO, detailing its GMP, financials, peer comparisons, and insights from recent infrastructure IPOs. Whether you’re a retail investor or a seasoned market participant, this article equips you with the knowledge to navigate this investment opportunity. 📈

About Highway Infrastructure Limited 🏗️

Founded in 1995, Highway Infrastructure Limited is a well-established company specializing in infrastructure development and management. Its operations span three core segments: tollway collection, Engineering, Procurement, and Construction (EPC) projects, and real estate development. The company manages 15 toll plazas across 11 states and one Union Territory in India, leveraging advanced technologies like Automatic Number Plate Recognition (ANPR) on projects such as the Delhi-Meerut Expressway.

Financially, Highway Infrastructure reported a revenue of ₹504.48 crores in FY25, down 13% from ₹576.58 crores in FY24, reflecting challenges in the EPC segment. However, its Profit After Tax (PAT) grew by 5%, rising from ₹21.41 crores to ₹22.40 crores. The company’s EBITDA for FY25 was ₹31.32 crores, with a margin of 6.32%. Its net worth stood at ₹117.72 crores, with total assets of ₹231.56 crores and a debt-to-equity ratio of 0.61 as of March 31, 2025. These metrics underscore its operational stability and growth potential in a sector driven by government initiatives like Bharatmala and PM Gati Shakti.

Highway Infrastructure IPO Details 📅

The Highway Infrastructure IPO is a book-built issue set to open for subscription from August 5, 2025, to August 7, 2025, with a tentative listing date of August 12, 2025, on the BSE and NSE. The IPO, valued at ₹130 crores, comprises a fresh issue of 1.39 crore shares worth ₹97.52 crores and an offer for sale (OFS) of 0.46 crore shares worth ₹32.48 crores. The price band is set at ₹65 to ₹70 per share, with a face value of ₹5 per share.

The minimum lot size is 211 shares, requiring retail investors to invest at least ₹14,770 (211 shares x ₹70). The allocation structure reserves 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII). The net proceeds from the fresh issue will fund working capital requirements and general corporate purposes. Pantomath Capital Advisors Pvt Ltd serves as the book-running lead manager, with Bigshare Services Pvt Ltd as the registrar.

Grey Market Premium (GMP) 💰

The Grey Market Premium (GMP) is the difference between the IPO issue price and the price at which shares trade in the unofficial grey market before listing. As of August 5, 2025, the GMP for the Highway Infrastructure IPO is approximately ₹40-41, indicating a premium of about 57% over the upper end of the price band (₹70). This suggests an estimated listing price of around ₹110 per share.

A robust GMP signals strong investor confidence, often driven by the company’s fundamentals and market conditions. However, GMP is an unofficial metric and can fluctuate due to changes in market sentiment or external factors. Investors should view it as one of many indicators when assessing the IPO’s potential. 🔍

Case Study: Performance of Recent Infrastructure IPOs 📊

To contextualize the Highway Infrastructure IPO’s potential, examining the performance of recent infrastructure IPOs provides valuable insights. The infrastructure sector in India has seen significant IPO activity, driven by government investments and initiatives like the National Infrastructure Pipeline. Below are examples of recent infrastructure IPOs and their listing performance:

Enviro Infra Engineers IPO, launched in November 2024, focused on water and wastewater treatment. Priced at ₹148, it listed at ₹220, delivering a 49% gain. The strong performance was attributed to robust demand for environmental infrastructure solutions. Vishnu Prakash R Punglia IPO in 2023, with an issue price of ₹99, listed at ₹165, yielding a 67% gain, driven by its focus on road and bridge construction. In contrast, Afcons Infrastructure IPO in October 2024, priced at ₹463, listed at ₹426, resulting in an 8% loss due to market volatility. Ceigall India IPO, priced at ₹401 in August 2024, listed at ₹419, achieving a modest 5% gain, supported by its expertise in complex structural projects like flyovers and tunnels.

These examples highlight the variability in infrastructure IPO performance. While some, like Enviro Infra and Vishnu Prakash, delivered substantial gains, others, like Afcons, faced challenges. The Highway Infrastructure IPO’s GMP of ₹40-41 aligns with the stronger performers, suggesting potential for a favorable listing, though market conditions will play a critical role.

Peer Comparison 📉

Highway Infrastructure operates in a competitive landscape alongside established players in toll collection and EPC projects. The following table compares Highway Infrastructure with its key peers based on the latest financial and operational metrics:

Highway Infrastructure’s revenue is modest compared to larger peers like IRB Infrastructure Developers and H.G. Infra Engineering, but its EBITDA margin of 6.32% is higher than Udayshivakumar Infra’s 0.95%. Its P/E ratio of 22.4 is higher than H.G. Infra’s 14.00 but lower than IRB’s 44.38, suggesting a balanced valuation. The company’s operations across 7 states and 15 toll plazas position it as a niche player with growth potential, though its scale is smaller than industry leaders.

Listing Gains of Recent Infrastructure IPOs 📈

The following table and chart summarize the listing performance of recent infrastructure IPOs, providing a benchmark for Highway Infrastructure’s potential:

This table illustrates the range of outcomes for infrastructure IPOs, with gains as high as 67% and losses up to 8%. The Highway Infrastructure IPO’s GMP suggests it could align with the higher-performing IPOs, but investors should remain cautious of market volatility.

Conclusion 🎯

The Highway Infrastructure IPO offers a compelling opportunity to invest in India’s burgeoning infrastructure sector, supported by a strong GMP of ₹40-41, which points to a potential listing price of ₹110, a 57% premium over the issue price. The company’s focus on toll collection, EPC projects, and real estate, combined with its financial stability, makes it an attractive prospect. However, the mixed performance of recent infrastructure IPOs underscores the importance of evaluating market conditions and company fundamentals.

Investors should weigh the IPO’s valuation, with a P/E ratio of 22.4, against peers like IRB and H.G. Infra, and consider risks such as the company’s reliance on government contracts and modest scale. While the GMP indicates optimism, it’s not a guaranteed predictor of success. Thorough research and alignment with investment goals are essential for making informed decisions.

Sources 📚

InvestorGain
IPO Watch
Univest
IPO Central

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