NHAI to consider public InvIT to widen investor base, include retail buyers

NHAI aims to launch a public infrastructure investment trust to allow retail investors access to highway assets and expand the overall investor base for asset monetisation

Aiming to raise public funds for its asset monetisation pipeline, the National Highways Authority of India (NHAI) on Monday said it is considering a new infrastructure investment trust (InvIT), which will be open to retail investors.

 

“NHAI has successfully launched private InvIT and monetised over 2,300 km of highways. It is now considering a public InvIT to increase the overall investor base, develop a competitive environment in the InvIT market, and mitigate the risk of limited investor base. Further, a public InvIT will also cater to retail investors, thereby providing access to infrastructure assets,” the highway authority said in its Asset Monetisation Strategy Report.

 

 

Union highways minister Nitin Gadkari had repeatedly said that he wants the citizens of the country to benefit from the rapid infrastructure expansion in the country. This will happen by investment in highway projects via InvITs.

 

However, officials said that the process has turned out to be lengthy and complicated with tough regulations in place.

 

In its report, NHAI did not confirm that it will decisively go through with the proposal.

 

InvITs are one of the three primary modes of highway monetisation used by the NHAI. Here, a trust handles several road assets and investors can benefit from toll revenues on these roads by becoming unit holders.

 

NHAI has contributed significantly to the first National Monetisation Pipeline. It has achieved 71 per cent of NITI Aayog’s NMP road sector pipeline target from 21-22 to 24-25 (₹1.15 trillion achieved out of a target of ₹1.6 trillion).

 

Total monetisation till now stands at ₹1.4 trillion.

 

The highways ministry is also likely to be given the steepest target of all government departments in the second monetisation pipeline, which will run up to 2029-30. It may have to monetise highways worth ₹3.5 trillion over the next five years.

 

The authority also mentioned an issue that had previously been a bone of contention between the private sector and the government — determination of initial estimated concession value (IECV).

 

In 2020, the authority had stopped declaring IECV of toll-operate-transfer (TOT) bundles, fearing a concentration of bids around the disclosed price.

 

The sector, in response, had told the authority that the disclosure of IECV was an important requirement.

 

After this, it started disclosing the assumptions made to reach the IECV, but not the amount itself. Now, it is planning to make the disclosure model more transparent.