More projects on road for NHAI's infrastructure investment trust

The evaluation of more highway stretches to be offered for the infrastructure investment trust (InvIT) this year is underway. The National Highways Authority of India (NHAI) plans to increase the share of these market instruments in its future monetisation plan.

It is expected that the InvIT would overtake the toll-operate-transfer (TOT) projects as the preferred monetisation route for the authority during the current year.

According to an official, a slew of projects is under consideration. A majority of these highways are expected to be monetised via the InvIT route, given a large volume of projects went earlier to TOT.

The Ministry of Road Transport and Highways and the NHAI are preparing detailed project reports and conducting traffic studies of these projects. These roads are not concentrated in one particular region but spread across the country and are likely to be ones that have a high toll revenue.

“We have potential international and domestic investors and the contracts we offer should entice them,” added the official.

The NHAI plans to offer 19 projects worth Rs 35,000 crore under the InvIT model — a platform to monetise roads over the next three to five years.

The initial bundle of road projects selected for InvIT provides better prospects as they are part of the national corridor.

The trust is being set up as a private listed InvIT to attract large institutional investors. It is an investment trust that works like a mutual fund and is regulated by the Securities and Exchange Board of India (Sebi).

Under this model, the assets are placed in an InvIT, where investors put in money and the income generated from such assets is paid as dividend.

The NHAI InvIT will also see an offer-for-sale. However, the authority did not specify the amount details of the proposed offer in the draft papers with Sebi.

The units are proposed to be listed on the National Stock Exchange and the BSE.

The merchant bankers to the issue are ICICI Securities, Kotak Mahindra Capital Com­pany, and SBI Capital Markets. 

The markets regulator notified the regulations for InvITs and real estate investment trusts in 2014. Only a few such trusts have listed their units in the country so far.