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Is Bharat Highways Invit a Good Investment Option?

 “Understanding Bharat Highways Infrastructure Investment Trust: A Detailed Analysis

Bharat Highways Infrastructure Investment Trust road portfolio comprises seven roads spread across different regions in India, managed under the Hybrid Annuity Model with a focus on stable income generation and strategic expansion to strengthen its infrastructure asset base. BHI Trust road portfolio consists of seven highways located in states like Punjab, Andhra Pradesh, Gujarat, Maharashtra, and Uttar Pradesh. These roads are managed and maintained under concession rights granted by the National Highways Authority of India (NHAI).

Should you buy “
Bharat Highways Invit”?

Investors should understand that Bharat Highways Infrastructure Investment Trust is an investment trust focused on infrastructure assets in India, managed by SEBI. Bharat Highways Infrastructure Investment Trust IPO Had Subscribed just above 8 times. It shows that Reasonable interest in this IPO or we can say that not a good response to BHI trust IPO.  This is the reason BHI trust IPO was getting “Zero” premium even in the Gray Market.

 “Bharat Highways Infrastructure Investment Trust” was mainly suitable for HNIs more than retail investors due to slow capital appreciation and uneven cash flows. On table, nothing much left for Retail Investors Post IPO Listing of” Bharat Highways Infrastructure Investment Trust”. We have not much expectation from BHI Trust. It will be good if investors will look for another stock for making money.

Expectations of Long term investors from “Bharat highways infrastructure Trust”:

Dividend Expectation from “Bharat highways infrastructure investment trust”:

If we will analysis the nature of InvITs and their distribution policies, investors can expect a regular income stream in the form of dividends from Bharat Highways InvIT. The trust is expected to distribute 90% of its net distributable cash flow to unit holders every six months, which can provide a steady source of income for investors.

Bharat Highways Invit on Taxation:

 Dividends are tax-exempt until cumulative payments equal the issue price; long-term capital gains are taxed at 10% beyond Rs 1 lakh.

Credit Ratings of “Bharat Highways Invit”:

BHI trust has received high credit ratings from reputable agencies such as CRISIL, CARE, and India Ratings and Research, indicating a strong financial standing and credibility in managing its road assets.

Expansion Plans of “Bharat Highways Invit”:

Bharat Highways is actively pursuing additional road assets to enhance its road portfolio, aiming to create a wider and more lucrative collection of infrastructure assets. The trust's growth strategy includes acquiring new infrastructure assets to generate comparable revenue.

Financial Performance of “Bharat Highways Invit”:

Financial Performance of Bharat Highways Invit:

As per available Data, BHI trust Profit After Tax (PAT) fluctuated over the last three years, with a notable increase to ₹527.05 crores by March 2023. BHI trust revenue and assets have shown growth over time.BHI Trust IPO aim was to provide funds for SPVs' loan repayments and general expenses, indicating a focus on financial stability and growth.

In Conclusion, Based on our above discussion, we can say that Roads infrastructure projects are always a long term bet so Investors may consider buying if they believe in the potential growth of infrastructure assets managed by the trust and are comfortable with the risks associated with the investment. Fluctuation in the longer term Interest rates will be biggest concern for the company.  Short term Traders should avoid trade in ““Bharat Highways Infrastructure Investment Trust”.

What is the long term Targets of “Bharat Highways Invit”?

Long term Investors should not expect much return in BHI Trust stock. We will not be surprised if this stock will give Flat to moderate returns in the longer term. One can expect long term targets of 115rs to 120rs. You need to track the financial performance of the company every quarter because circumstances can be changed anytime & accordingly Price targets can be upgraded or downgraded for coming months and years.

Should you Hold or sell “Bharat Highways Invit” for long term?

It is very early stage to say clearly “Hold” on BHI Trust Stock because Holding the investment could be an option for those who are willing to wait for potential returns in the long term ( 2 to 3 years). The trust's revenue primarily relies on annuity income from the National Highways Authority of India (NHAI), which could provide a stable income stream but Projects completion rate is longer. BHI Trust IPO price band 98rs to 100rs per share, it was fairly valued. Investors should keep this thing into their mind that BHI Trust will be very long term investment. However, we do not recommend to sell “Bharat highways infrastructure Trust” even after IPO Listing.

What is the Risk Factors & Strengths associate with” Bharat Highways Invit?

It is crucial to consider various risk factors associated with investing in Bharat Highways InvIT, such as dependency on NHAI annuity income, asset acquisition challenges, financial covenants, project SPVs performance, regulatory compliance risks, and limited operating history

Strengths and Risks of Bharat Highways Infrastructure Investment Trust:

Strengths Of Bharat Highways Invit:

  • Owns stable profitable assets with predictable cash flows.
  • Diverse portfolio of roads across different regions.
  • Strong history of managing road projects in India

Risks associate with Bharat Highways Invit:

  • Dependency on NHAI annuity income for revenue.
  • Acquisition challenges for new revenue-generating assets.
  • Reliance on third parties for asset operation and maintenance poses risks.
  • Investment Considerations


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