Alpha Alternatives to Launch Rs 400 Crore Highway InvIT IPO
Alpha Alternatives is launching Anantam Highways Trust, a road infrastructure investment trust (InvIT), aiming to raise Rs 400 crore through an IPO. The trust will initially include seven project SPVs covering 272 km of highways across six states, with a fair enterprise value of Rs 5,000 crore. The InvIT, managed by Alpha Alternatives Fund-Infra Advisors and Arsenio Strategies, has received AAA (Stable) ratings from India Ratings & Research and ICRA. The highways are developed under the Hybrid Annuity Model, offering stable cash flows. This launch represents a growing trend in infrastructure financing in India.
*this image is generated using AI for illustrative purposes only.
Alpha Alternatives is set to make a significant move in the infrastructure investment sector with the launch of Anantam Highways Trust, a road infrastructure investment trust (InvIT). The company aims to raise approximately Rs 400.00 crore through this initial public offering (IPO), marking a notable development in the highway infrastructure financing landscape.
Portfolio Details
The Anantam Highways Trust will initially comprise seven project Special Purpose Vehicles (SPVs), encompassing around 272 kilometers of highways. These projects, built under the Hybrid Annuity Model (HAM), are strategically located across six states:
- Karnataka
- Telangana
- Gujarat
- Bihar
- Tamil Nadu
- Puducherry
The combined portfolio boasts a fair enterprise value of about Rs 5,000.00 crore, highlighting the substantial scale of the investment opportunity.
Management Structure
The InvIT will be managed by a team of experienced entities:
- Investment Manager: Alpha Alternatives Fund-Infra Advisors
- Project Manager: Arsenio Strategies
Credit Rating
The InvIT has received strong credit ratings from two prominent agencies:
| Agency | Rating |
|---|---|
| India Ratings & Research | Provisional AAA (Stable) |
| ICRA | Provisional AAA (Stable) |
These ratings reflect the high credit quality and stable outlook of the InvIT's debt.
Hybrid Annuity Model (HAM) Advantage
The highways included in the Anantam Highways Trust are developed under the Hybrid Annuity Model, a public-private partnership structure that offers several benefits:
- Government Contribution: The government provides 40% of the project costs during the construction phase.
- Developer Funding: Developers fund the remaining 60% of the project costs.
- Annuity Payments: Developers receive semi-annual annuity payments, which include interest and inflation adjustments.
This model provides more stable cash flows compared to toll-based models, making it particularly suitable for InvITs focused on income stability.
Market Implications
The launch of Anantam Highways Trust represents a growing trend in infrastructure financing in India. InvITs are becoming increasingly popular as they offer investors an opportunity to participate in income-generating infrastructure assets while providing developers with an alternative funding source.
As the infrastructure sector continues to grow, such InvITs are likely to play a crucial role in bridging the funding gap and facilitating the development of key infrastructure projects across the country.
The success of this IPO could pave the way for more such offerings in the future, potentially transforming the landscape of infrastructure investment in India.
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