NHAI's Infrastructure Investment Trust set to be launched next month

The maiden Infrastructure Investment Trust (InvIT) of the National Highways Authority of India (NHAI), which was delayed for around a year, will be launched next month, according to an official in the know. The highways authority plans to raise over Rs 5,000 crore through this route.

The initial set of roads to be offered via the InvIT are part of national corridors, providing long-term prospects.

“We are following the due statutory process for the launch and in line with prevailing market conditions expect to raise about Rs 5,100 crore by monetising five operational roads. We are likely to go to the market within a month,” a senior NHAI official told Business Standard.

In the future, the authority plans to offer 19 projects worth Rs 35,000 crore under the InvIT model. NHAI InvIT is a platform to monetise roads over the next three-five years, the official said, adding that the initial set of roads are part of national corridors and provide excellent long-term prospects.

InvIT is being set up as a private listed instrument 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).

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

NHAI’s InvIT became a casualty of the Covid 19 crisis after a nationwide lockdown was imposed in March last ye­ar. It was earlier set to launch its first InvIT in May 2020.

In December 2019, the Union Cabinet approved the proposal of the Ministry of Road Transport and Highways to authorise NHAI to set up InvITs to monetise national highways that have a toll collection track record of at least one year. The money raised through such monetisation will be used for further investment in the road sector. Part of the toll revenue will, however, be used for operation and maintenance.

It also gave the NHAI the flexibility of holding assets under the trust directly, or through a special purpose vehicle/holding company of the NHAI.

This InvIT is the NHAI’s second asset monetisation mo­del, following the earlier model of placing projects un­der toll-operate-transfer (TOT). A joint venture of Macquarie and Ashoka Buildcon had bagged the first batch of TOT projects in 2018, after paying an upfront fee of Rs 9,680 crore for nine national highway stretches.