NEW DELHI: The National Highways Infrastructure Trust (NHIT), sponsored by the National Highways Authority of India (NHAI), is likely to raise over Rs 20,000 crore from domestic and foreign investors over the next few weeks for acquisition of 11 operational road assets. This will be the fourth and the largest fundraise round so far by the trust.
The issue will see participation of the Employees’ Provident Fund Organisation (EPFO) as an equity investor for the first time, official sources said. Around Rs 10,000 crore could be raised through issuance of fresh equity units, with a matching debt component. Of the equity amount, some part would come as new subscriptions from existing unitholders in proportion of their current holdings, the sources said, adding that the exact amount to be raised would depend on the book building process.
Canadian funds Ontario and CPP Investment Board Private Holdings hold 25% each in the trust. The NHAI (15.48%) and SBI AMC (9.34%) are other major unit holders. In the coming round of acquisition of assets by NHIT, more equity investors are expected to join, the most prominent of them being the EPFO.
The EPFO’s Central Board of Trustees (CBT) in November had approved guidelines to invest in the public sector-sponsored infrastructure investment trust (InvIT) and real estate investment trust (ReIT).
The new assets will be housed in a special purpose vehicle (SPV). The NHIT model involves the trust to run and maintain the operational highway projects for specified periods, collect toll revenues and pay back the investors. This model, along with the toll-operate-transfer model where private investors take up and run NHAI assets under long-term lease, helps alleviate the NHAI’s financing burden. The proceeds of monetisation through InvIT is used by the NHAI to repay its debt.
In the past three rounds, an aggregate amount of Rs 25,899 crore has been raised by the NHAI through the InvIT route. So far NHIT has acquired 15 road stretches spanning 1,525 km spread across nine states — Uttar Pradesh, West Bengal, Assam, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Karnataka, and Telangana. Concession period on these roads ranges from 20 to 30 years.
The road stretches that will be acquired by NHIT in the latest round are in Karnataka, Andhra Pradesh, Karnataka, Uttar Pradesh, Uttarakhand, and Chhattisgarh.
In 2023-24, around Rs 15,700 crore was raised by monetisation of 889 km of highways through InvIT.
For 2024-25, the NHAI is aiming to raise around Rs 54,000 crore from monetisation of functional road assets through InVIT and the toll-operate-transfer (TOT) route, and project-based financing which will be its highest-ever in a year. Around Rs 8,353 crore has already been raised through monetisation of two road stretches through TOT this financial year.
For monetisation through TOT and InVIT, the NHAI has identified 34 highway stretches with a total length of 2,822 km spread all over India for monetisation in 2024-25.
In the current financial year, apart from regular debt servicing, the NHAI has repaid debt of around Rs 56,000 crore though no money has been raised through InVIT. For the next financial year, the budgetary support for the NHAI has been pegged at Rs 1.7 lakh crore, which represents negative growth in real terms (Rs 1.69 lakh crore is earmarked for FY25).
The overall capital expenditure allocation for the ministry of road transport and highways for building highways is also flat at Rs 2.72 lakh crore for FY26.
Source: The Financial Express
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