No immediate plan to get retail investors into NHAI InvIT: CEO Suresh Goyal

The National Highways Authority of India’s (NHAI’s) infrastructure investment trust (InvIT) has no immediate plan to allow retail investment into InvIT's equity, said Suresh Goyal, managing director and chief executive officer of the trust.

The NHAI InvIT has issued bonds to encourage retail investment.

Goyal told a press conference on Thursday that deliberations were on with the Securities and Exchange Board of India (Sebi) to make the private-listed InvIT public. A decision on whether and when to make the transition would take time. The trust is barely a year old.

The trust issued non-convertible debentures (NCDs) worth Rs 1,500 crore, allowing investors to invest a minimum of Rs 10,000 at a 7.9 per cent coupon rate, with returns beginning from the eighth year. The tenor of the bond is 25 years with an effective yield of 8.05 per cent, the management said.

The NCD issuance has a 25 per cent reservation for retail investors.

Union Minister Nitin Gadkari said that the NCD issue, InvIT’s first, was done to allow common citizens to benefit from infrastructural growth and get good returns.

“There is no problem with funding as there are pension funds and others willing to invest. But I’ve decided that now I’ll make roads with the money of retired senior citizens, and from small people like constables, journalists, and service people. They can invest in NHAI. My toll income is Rs 40,000 crore currently, and by the end of 2024, it will be Rs 1.4 trillion,” Gadkari had said at Business Standard’s India@75 conclave last month.

The InvIT, which saw an infusion of Rs 6,011 crore of capital from two Canadian institutional investors in the first issuance, has raised Rs 1,217 crore in the latest round. The investments came from Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board, State Bank of India, SBI Pension Fund, SBI Mutual Fund, IOCL Employee Provident Fund, L&T Staff Provident Fund, Rajasthan Rajya Vidyut Karamchari Pension Fund, TATA AIG, and Star Union Daiichi Life Insurance.

It plans to expand its equity investor pool in the coming rounds of issuance.

The InvIT issuance will be financed through Rs 1,430 crore of funds raised through distribution of units, Rs 850 crore of bank loans, and the NCDs.

NHAI, as the InvIT’s sponsor, invested Rs 213 crore to maintain a 15 per cent unit-holding. The fundraise will help the trust acquire three road projects from NHAI at an enterprise value of Rs 3,800 crore. Union road transport and highways secretary Giridhar Aramane had reportedly said that another issuance worth Rs 7,000 crore was in the works and could be completed before the end of the financial year.

The highway authority has committed to offer 1,500 kms of operational highways to the InvIT over the next three years. With the acquisition of three road projects through the latest issuance, NHAI InvIT will own, operate, and maintain a portfolio of eight operating toll roads with an aggregate length of 636 kms spread across the states of Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Telangana, and Uttar Pradesh, with concession period ranging between 20 and 30 years.