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NHAI launches InVIT

NEW DELHI :

The National Highways Authority of India (NHAI) has launched its infrastructure investment trust (InVIT),  part of the government’s national monetization pipeline, which will initially have a portfolio of five operating toll roads with an aggregate length of 390 kilometers, and an enterprise value of  ₹8,011.52 crore, the Ministry of Road Transport & Highways (MoRTH) said in a statement on Wednesday. 

The ministry said that NHAI InvIT attracted two international pension funds, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, as anchor investors, who will hold 25% of the units each.

“The balance units were placed with a diversified set of domestic institutional investors comprising pension funds, insurance companies, mutual funds, banks and financial institutions,” the ministry said adding that NHAI InvIT will be funded through debt of  ₹2,000 crore from State Bank of India, Axis Bank and Bank of Maharashtra while the balance will be funded by issuing units of  ₹6,011.52 crore to international and domestic institutional investors, and NHAI as sponsor.

InvITs are collective investment vehicles similar to a mutual fund, which enables direct monetary investment from individual and institutional investors in infrastructure projects which earn them a small portion of the income as return.

InvITs typically enable developers of infrastructure assets to monetise their assets by pooling multiple assets under a single entity (trust structure). 

“These roads are located across the states of Gujarat, Karnataka, Rajasthan and Telangana. NHAI has granted new concessions of 30-years for these roads. In view of the long-term nature of the assets, the units of InvIT were placed with international and domestic institutional investors,” MoRTH said in the statement.  

“The units have been issued under the private placement route under SEBI InvIT Regulations, 2014 at the upper valuation band of Rs.101 per unit. The units will be listed on NSE and BSE,” it added.

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