CPP Investments to invest Rs 2,080 cr in National Highways Infra Trust

CPP Investments is a global investment management organisation. This is CPP Investments' third follow-on investment since its initial investment in NHIT in 2021

The Canada Pension Plan Investment Board (CPP Investments) has announced a follow-on investment of Rs 2,080 crore (C$346 million) in the units of National Highways Infra Trust (NHIT), an infrastructure investment trust (InvIT) sponsored by the National Highways Authority of India (NHAI).

 

This marks CPP Investments’ third follow-on investment since its initial commitment to NHIT in 2021. CPP Investments is a global investment management organisation that manages the assets of the Canada Pension Plan.

 

The investment is part of NHIT’s institutional placement and will be used to partially fund the acquisition of 11 operating toll roads currently owned by NHAI.

 

Following this investment, CPP Investments will continue to hold a 25 per cent stake in NHIT, with its cumulative investment increasing to Rs 5,760 crore (C$960 million).

 

“India remains a strategic focus for CPP Investments, with infrastructure such as toll roads playing a key role in driving the country’s rapid economic growth. We believe this follow-on investment is an excellent opportunity to generate attractive risk-adjusted returns for the CPP Fund,” said James Bryce, managing director and head of infrastructure at CPP Investments.

 

NHIT recently concluded its fourth round of fundraising at an enterprise value of around Rs 18,380 crore, making it the largest monetisation transaction in the history of India’s road sector. With the completion of this round, NHIT’s total realised value across the four rounds stands at over Rs 46,000 crore.

 

In the current round, NHIT raised Rs 8,340 crore in unit capital from domestic and international investors, along with Rs 10,040 crore in debt from domestic lenders. These proceeds will be used to acquire national highway stretches at a total concession value of Rs 17,738 crore, including a premium of Rs 97 crore.

 

Units were subscribed by both existing and new investors, including domestic pension and provident funds such as Employees' Provident Fund Organisation (EPFO), L&T PF, Rajasthan Rajya Vidyut Karamchari PF, and Indian Oil Corporation PF; insurance firms such as Axis Max Life Insurance; banks and financial institutions including National Bank for Financing Infrastructure and Development, Axis Bank, and IndusInd Bank; and mutual and investment funds like Nippon India, Baroda BNP Paribas, Nuvama, and White Oak Capital. Ontario Teachers' Pension Plan Board, NHIT’s existing foreign investor, also participated in the round to its maximum allowable limit.

 

EPFO’s Rs 2,035 crore commitment marked its first-ever investment in an InvIT.

 

The acquisition of the 11 road assets will expand NHIT’s portfolio from 15 to 26 operating toll roads, comprising 41 toll plazas. All assets have been acquired from NHAI. Post-transaction, NHIT’s total portfolio will span over 2,345 kilometres across 12 Indian states, with concession periods ranging between 20 and 30 years.