As part of National Monetisation Pipeline, National Highways Authority of India (NHAI) has launched its Infrastructure Investment Trust (NHAI InvIT), said a press statement.
In view of the long-term nature of the assets, the units of NHAI InvIT were offered to international and domestic institutional investors. The total enterprise value of the 5 roads was pegged at Rs.8011.52 crore, added the statement.
NHAI InvIT is funding that through debt of Rs.2000 crore from State Bank of India, Axis Bank and Bank of Maharshtra. The balance is being funded by issuing units of Rs.6011.52 crore to international and domestic institutional investors, and NHAI as Sponsor.
NHAI InvIT was able to attract international pension funds and a persified group of domestic institutional investors comprising pension funds, insurance companies, mutual funds, banks and financial institutions, which have submitted their bids for Rs.6203 crore, said NHAI.
The Board of the Investment Manager of NHAI InvIT will meet on November 3, 2021 to decide on the allocation of units to investors.
“NHAI InvIT is expected to provide attractive long term returns to its investors. Participation by marquee international and domestic investors will also benefit NHAI InvIT in the areas of governance, transparency and quality maintenance of national assets,” said Giridhar Armane, Secretary MoRTH and NHAI Chairman.
NHAI InvIT has been set up to monetize its road projects, with an initial portfolio of five operating toll roads with an aggregate length of 390 kilometers.
These roads are located across the states of Gujarat, Karnataka, Rajasthan and Telangana. NHAI has granted new concessions of 30-years for these roads.
This is the second InvIT in the country to be floated by a public sector company after PowerGrid Corporation of India (PGC) raised about Rs 3,480 crore in April.
Three top Canadian pension funds, including Caisse de dépôt et placement du Québec (CDPQ), and leading local insurers such as Life Insurance Corp. of India and HDFC Life are among the frontline investors likely to buy into the InvIT, ET had reported in August.
Other likely investors are the Canada Pension Plan Investment Board (CPPIB) and the Ontario Teachers’ Pension Plan (OTTP), besides India’s ICICI Prudential Life Insurance, ET had said.
Besides institutional investors, the Employees’ Provident Fund Organisation (EPFO) is also considering an investment in the InvIT.
As part of the monetisation programme announced by the government, NHAI plans to sell about 32 more operational road assets spanning 1,500 km as well as upcoming ToT (toll operate transfer) projects.