Anantam Highways Trust IPO Explained: Highway to Easy Returns?

Anantam Highways Trust is a newly formed investment fund that buys and manages completed national highways in India. Its job is to keep these roads running smoothly while earning from fixed payments guaranteed by the government.

The Trust is launching an Initial Public Offering (IPO) worth ₹400 crore, from October 7 to October 9, 2025, with a price band of ₹98-₹100 per unit. Minimum investment is ₹15,000 (150 units per lot).

In this blog, you will get a clear guide to:

• What exactly Anantam Highways Trust does and how it makes money
• Where the IPO money will go, and why this fund is raising it now
• The Trust’s strengths and risks
• How it compares with other infrastructure funds (InvITs)
• A bigger picture view of India’s roads industry and why now is a critical time for investment

IPO Overview

• IPO Date: October 7 to October 9, 2025
• Total Issue Size: ₹400 crore
• Price Band: ₹98 to ₹100 per share
• Minimum Investment: ₹15,000
• Lot Size: 150 Shares
• Tentative Allotment Date: October 14, 2025
• Listing Date: October 17, 2025 (Tentative)

How Anantam Highways Trust Operates?

Anantam Highways Trust is what’s called an Infrastructure Investment Trust (InvIT). It is like a mutual fund, but instead of buying stocks, it buys completed highways. By law, InvITs must invest at least 80% of their money in finished, revenue-generating projects.

Here’s how it earns: the Trust’s roads work under the Hybrid Annuity Model (HAM), a government-backed system designed to reduce risk for private investors. The National Highways Authority of India (NHAI) pays fixed, semi-annual sums for 12–13 years. Because payments are not tied to traffic, the Trust doesn’t worry about how many vehicles use the roads.

The HAM payments have three parts:

• Fixed Payback (Annuity): When the roads were built, the government paid 40% of the cost. The remaining 60% is paid back slowly, like a loan repayment, over 15 years in 30 fixed installments. For example, if a road cost ₹100 crore, ₹60 crore is paid back in small, fixed chunks every 6 months.
• Interest on the Payback: On top of the fixed amount, the Trust earns interest, just like a bank gives you interest on your savings. This interest is linked to market rates:
  • For some roads, it’s the average lending rate charged by top banks for 1 year (called MCLR), plus 1.25%. So, if banks charge more, the Trust earns more.
  • For others, it’s the rate set by RBI (the Bank Rate), plus 3.00%. So, if RBI raises its rate, the Trust’s interest income also goes up. In simple terms, when bank or RBI rates rise, the Trust earns more interest, like a deposit that pays more when market rates climb.
• O&M Payments: The Trust also gets extra money to keep the roads in good shape. This amount increases with inflation (like WPI or CPI), so rising costs are covered.

The Trust starts with seven road assets covering 1,086.6 lane kilometers across six regions. All are fully operational and already earning. The sponsor, Alpha Alternatives Fund Advisors LLP, and Dilip Buildcon Limited are the sellers. They are being paid in ownership units of the Trust, rather than cash. The IPO money will mainly go toward repaying the heavy loans these road companies already have ₹3,571.78 crore as of June 30, 2025.

For example, think of Anantam Highways Trust like a housing society that owns ready apartments and earns steady rent from a very reliable tenant. The builder (Dilip Buildcon) already built the “apartments” (the roads). Now the Trust buys these ready roads and simply collects fixed rent every six months from one tenant, the government’s NHAI, under a long agreement, while keeping the roads maintained and in good condition.

Objectives of the IPO

• Debt Repayment: Out of ₹400 crore raised, ₹376 crore will be lent to the road companies (SPVs) to repay their bank loans and interest. These loans total ₹3,571.78 crore as of June 30, 2025. Paying off debt early will reduce interest costs and improve profits.
• General Corporate Purposes: A small part of the IPO funds will go toward regular business needs, like paying for audits, maintenance, or taking advantage of sudden growth opportunities.

Strengths:

• Government-Guaranteed Revenue: Every rupee earned comes from NHAI, a sovereign-backed body. In Q1 FY26, revenue was ₹202.04 crore, almost all from fixed annuity payments. This removes traffic volume risk.
• Top Credit Ratings: The Trust holds ‘Provisional IND AAA/Stable’ and ‘Provisional ICRA AAA(Stable)’ ratings for proposed bank facilities worth ₹3,300 crore. AAA means rating agencies believe the Trust has the strongest capacity to repay debts.
• Long-Term Cash Flow Visibility: The current road contracts will keep paying for 12.65 to 13.42 more years. That’s like signing a fixed-rent agreement with the government for over a decade.
• Natural Hedge Against Interest Rates: If bank loan rates rise, the annuity payments from NHAI also rise because they are linked to those same rates plus 1.25%.

Risks:

• Single Customer Risk: All revenue depends on NHAI. Any delay in government payments could hurt cash flows.
• High Debt Load: The road companies have large borrowings of ₹3,571.78 crore. Even with predictable revenue, short-term cash could get tight if rates rise quickly beyond hedge levels.
• Operational Cost Inflation: Maintenance costs (for labour and materials) can rise unexpectedly. If inflation outpaces contractual adjustments, profit margins could shrink.
• No Terminal Asset Value: After 13 years, the government takes back the roads. That means there’s no resale value at the end of the concession period.

For detailed information, visit Anantam Highways Trust’s IPO page.

Peer Comparison

Direct NAV-based comparison isn’t possible yet because final unit numbers for Anantam Highways Trust have not been disclosed. But looking at others:

• Indus Infra Trust NAV is ₹115.81, trades at a 3.63% discount.
• Capital Infra Trust NAV is ₹82.26, trades at a 6.67% discount.

If Anantam’s final NAV/unit ends up near peers, investors will check if it’s offered at a similar or smaller discount. Importantly, Anantam’s starting portfolio value is ₹1,727.25 crore, and its fair enterprise value is ₹5,022.30 crore, comparable to large InvITs like IRB InvIT.

Source: RHP

Financial Performance of Anantam Highways Trust

Anantam Highways Trust’s financial journey tells a clear story: it moved from building new roads to earning regular income from finished highways. When construction was underway, the combined revenue of its road subsidiaries (SPVs) was high, about ₹2,590.2 crore in FY23 and ₹2,525.7 crore in FY24, but nearly all of this came from building projects rather than running them. In FY25, once construction stopped and all assets switched to collecting payments, revenue fell sharply to ₹926.5 crore, a drop of over 40%.

This drop was expected, not a sign of trouble. The Trust shifted its focus from “making roads” to “owning roads,” so construction revenue largely disappeared. At the same time, costs plummeted, construction expenses fell by over 93%, making profits soar. The Trust went from a net loss of ₹178.5 crore in FY23 and ₹160.1 crore in FY24 to a healthy profit of ₹410.6 crore in FY25. Cash flows became highly predictable; in Q1 FY26, profit was ₹67.9 crore on operating revenue of ₹202 crore.

The Trust’s assets have grown steadily, reaching ₹4,151.9 crore in FY25. Nearly all current revenue comes from annuity payments guaranteed by NHAI. This promise of stable income, plus low ongoing costs, means investors can expect consistent quarterly earnings.

Who Leads Anantam Highways Trust?

The sponsor is Alpha Alternatives Fund Advisors LLP, an experienced infrastructure asset manager registered with SEBI.

Jignesh Shah - CEO and Director, Chartered Accountant, 18+ years in infrastructure finance. Managed large funds before joining the Trust.

Naresh Kothari - Director, 24+ years in investment banking and capital markets, formerly President at Edelweiss.

Vijay Chhibber - Independent Director, retired IAS officer, ex-Chairman of NHAI and Union Secretary of MoRTH.

The rest of the board includes senior economists, banking veterans, and finance professionals, each with decades of relevant experience.

Industry Outlook

India’s infrastructure sector, especially highways, is more important than ever. The country has the world’s second-largest road network, over 6.3 million km as of 2025, and national highways, though only 2% of road length, carry about 40% of traffic.

The government is actively supporting this sector. Budget for roads reached ₹27,800 crore in FY25, underlining how crucial it is for trade, jobs, and daily travel. Economic growth, India’s GDP is expected to rise by 6.5% in FY26, means more vehicles and freight using these highways.

The preferred business model now is Hybrid Annuity Mode (HAM), which encourages private investors by offering fixed returns and lowering upfront risk. Developers only contribute about 15% equity, with the government funding 40% of project costs during construction. This model has helped bring in more private capital and kept income stable by removing risks tied to fluctuating vehicle numbers or toll collections.

Challenges do exist, land acquisition delays can slow projects, global inflation can spike costs for upkeep, and competitive bidding keeps profit margins tight. But for InvITs like Anantam, most risks tied to traffic and revenue have been minimized, providing solid ground for steady returns.

Analyst View

As a professional, I see Anantam Highways Trust’s IPO as a low-risk way to access government-backed infrastructure returns. Strengths like predictable cash flows, AAA ratings, and long concession periods make it attractive for conservative investors.

But remember, there’s no traffic upside and no asset value at the end of 13 years. Plus, the single-customer dependency means you must trust NHAI’s payment discipline.

If the IPO price offers a fair or discounted NAV compared to peers, and you want regular income from infrastructure without volatility, this could be a fit. For growth-hungry investors, however, the capped upside may feel limiting.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Anantam Highways Trust's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.