Highway Infrastructure’s IPO is LIVE: Should You Subscribe?

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The initial public offering (IPO) of Madhya Pradesh-based Highway Infrastructure Ltd (HIL) opened for subscription on August 5, and will close on Thursday, August 7, 2025. The grey market premium (GMP) for the IPO is hovering around Rs 40, indicating a 57% premium.

However, investors are advised to carefully consider both the opportunities and risks before subscribing. For a detailed review, see our comprehensive IPO analysis here.

Highway Infrastructure IPO Details 

  • Issue Details: Mainstream
  • Issue Size: Rs 130 crore
  • Fresh Issue: Rs 97.52 crore
  • Offer for Sale: Rs 32.48 crore
  • Price Band: Rs 65 – Rs 70
  • Lot Size: 211 shares
  • Listing Date: August 12, 2025

Overview of Highway Infrastructure Ltd

HIL is a diversified infrastructure development and management company with operations spanning Toll Collection, EPC (Engineering, Procurement, and Construction) Infrastructure and Real Estate. In FY25, the company derived 77.14% of its revenue from tollway collection, 21.28% from its EPC infrastructure segment and 1.58% from real estate operations.

HIL operates toll plazas across 11 States and 1 Union Territory and is among the few operators in India to implement ANPR (Automatic Number Plate Recognition) technology for toll collection, including on the Delhi-Meerut Expressway.

Highway Infrastructure Key Strengths

  • Extensive Industry Experience: With nearly 30 years in the tollway collection business and EPC infrastructure execution across multiple Indian states, HIL has built a diversified portfolio spanning toll operations, infrastructure projects and real estate.
  • Consistent Growth: From FY23 to FY25, HIL has demonstrated steady growth, with a CAGR of 4% in operating revenue, 6% in EBITDA and an impressive 27% in net profit, reflecting strong operational efficiency and financial discipline.
  • Solid Return Metrics: HIL exhibits high operational efficiency with healthy return metrics, including a Return on Equity (RoE) of 19% and Return on Capital Employed (RoCE) of 16.6% in FY25.
  • Healthy Order Book: As of May 31, 2025, HIL holds a consolidated order book of Rs 666.3 crore, comprising Rs 59.5 crore from tollway collection and Rs 606.8 crore from the EPC Infra division. This provides solid revenue visibility for the medium term.

Highway Infrastructure Risk Factors

  • Revenue Concentration: HIL derives approximately 77% of its revenue from tollway collection operations, primarily awarded by the NHAI. Additionally, its EPC Infra segment is heavily reliant on public sector clients. Loss or non-renewal of key contracts—particularly in tollway operations—could significantly impact business performance and financial outcomes.
  • Short Contract Tenure: NHAI contracts typically have a tenure of just one year, with limited scope for extension or renewal. This short duration may constrain revenue visibility and adversely affect operational stability.
  • Cash Flow Pressure: HIL reported negative cash flow from operations in FY25. Persistent negative cash flows may undermine the company’s financial stability and raise concerns about business continuity.
  • Contingent Liabilities: As of March 31, 2025, HIL reported contingent liabilities totalling Rs 79.6 crore. If these liabilities materialize, they could have an adverse impact on the company’s financial position.

Final Thoughts: Should You Subscribe to Highway Infrastructure’s IPO?

Highway Infrastructure Ltd has a strong track record in managing tollway collections and executing EPC infrastructure projects across multiple states in India. The company is backed by a solid order book worth Rs 666 crore.

Profitability has seen an improvement in recent years and return ratios remain healthy, reflecting operational stability. However, EBITDA margins are modest at 6–7%, significantly lower than those of larger peers in the sector.

Additionally, the IPO valuation, at ~21x FY25 earnings, appears demanding for a company of this size and scale. While the fundamentals are sound and sector outlook remains favourable, better value can be found in more established players with stronger profitability metrics.

Given these factors, investors looking for listing or near-term gains may consider subscribing, but long-term investors may find better investment opportunities among larger peers.

 For a deep dive into other IPOs, explore: IPO Corner on Liquide