By Geetanjali Kedia

IPO Size: Rs. 6,000 cr, entirely Fresh Issue  

• Rs. 5,850 cr for part-payment of Rs. 9,500 cr concession value to NHAI. So, this is essentially an OFS by government, under the National Monetisation Pipeline

Net Issue to Public: Rs. 3,840 cr

• After deduction Sponsor Portion (15%) Rs. 900 cr by NHAI and Strategic Investor Portion (21%) Rs. 1,260 cr by Employee Provident Fund Organisation and SBI Life
• Net Issue Allocation: Maximum 75% for institutions, minimum 25% for HNI, no retail quota

Price band: Rs. 99-100 per unit (not share)

M cap: Rs. 6,000 cr and Enterprise Value: Rs. 9,730 cr

IPO Date: Wed 11^th Mar 2026 to Fri 13^th Mar 2026, Listing Tue 24^th Mar 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

5 Road Assets

Raajmarg Infra Investment Trust (Raajmarg InvIT) is an NHAI-sponsored SPV, looking to acquire a portfolio of 5 road assets, aggregating 260 km highway, in 4 states of Jharkhand, Andhra, Tamil Nadu and Karnataka, through offer proceeds. Future acquisition pipeline over the next 3-5 years includes 1,500 km highway.

Premium for Acquisition?

These 5 road assets were valued at Rs. 9,299 cr, as of 31.12.25, by an independent valuer. Now they are being purchased for Rs. 9,500 cr, without any justification for Rs. Rs. 201 cr overpayment.

Important Parameters Unavailable

Yield on the InvIT can not be ascertained, as bridge between cash flow form operation and Net Distributable Cash Flow (NCDF) is not provided in the offer document. Moreover, break-up of distribution between interest, dividend (both taxable in investor’s hand at marginal rate) and capital repayment (tax free till Rs. 100) is not disclosed, making post-tax yield computation difficult.

On one hand SEBI chief is talking of simplifying IPO document, to help investors make informed decision. But on the other hand, even 1,884 pager offer document of Raajmarg InvIT does not have all ‘relevant’ data for prospective investor. We wonder why some calculations can not be mandatorily disclosed in public issue document?

Yields of Road InvITs (power assets excluded due to sector dynamics)

Most of the privately sponsored road InvIT’s are presently ruling at post-tax yields of 9-9.5%, barring Anantam:

• Indus Infra Trust (formerly Bharat Highways, sponsored by GR Infra) is ruling at Rs. 123 per unit, implying 11% pre-tax yield on last quarter DPU of Rs. 3.40 (57% as return of capital and 43% interest), implying post-tax yield of about 9-9.5%.
• Cube Highways, listed since 2023 through private placement, distributed Rs. 4.1 per unit in Q3FY26 (66% is taxable), implying pre-tax yield of 11.7% and post-tax of about 9.25%.
• KKR-sponsored Vertis Infra Trust’ Q2FY26 DPU of Rs. 3 per unit (50% taxable) implied pre-tax yield of 11.1%
• Last listed InvIT, Anantam Highways’ Q3FY26 DPU of Rs. 2.50 (56% for capital repayment, balance interest) implies a pre-tax yield of 9.7% on CMP of Rs. 103 per unit

However, NHAI sponsored National Highway InvIT, listed since Nov 2021 (through private placement to institutional investors, unlike an IPO now) is trading at lower yields. It distributed Rs. 2.74 per unit in Q3FY26, implying 7.1% pre-tax yield on CMP of Rs. 154, and trading at a 5% premium to NAV of Rs. 146.

Due to unavailability of expected distribution per unit, it will be speculative to assume high single digit post-tax yields for Raajmarg InvIT.

InvIT Past Performance – A Mixed Bag

InvIT yields are generally higher than REITs are infra assets lack capital appreciation unlike real estate and have fixed tenure, in some cases. But unlike REITs, many of the past InvITs have not rewarded shareholders, despite higher yields. Capital Infra Trust (sponsored by Gawar Constriction) and Anantam Highways have seen fall in unit prices in the past 1 year, despite interest rate cuts. Even L&T’s Interise Trust’s cash flows have also been declining, while IRB InvIT’s unit price is own 40% in last 9 years.

InvITs prices move inversely, with interest rates. Since domestic interest rate cut now seem behind us, not much scope for capital appreciation exists.