NEW DELHI: For the first time, retail investors will become equity holders in highway assets owned by the National Highway Authority of India (NHAI), as it seeks to tap the monetisation route more aggressively. The principal state-run highway construction agency is planning to launch a “public” infrastructure investment trust (InvIT), and revamp the Toll Operate Transfer (ToT) mechanism, which too is designed to raise resources from its brownfield assets.
The public InvIT will increase the investor base and run parallel to the extant private InvIT – National Highways Infra Trust (NHIT)– where the sponsor is NHAI with only institutional investors as unit holders.
Apart from NHAI, other investors in NHIT are Canadian funds Ontario and CPP Investment, with 25% units each, while Pension funds and mutual funds are other investors. The Employee Provident Fund Organisation (EPFO) joined as an investor in the last round of monetisation through NHIT in March.
The NHIT had raised funds from the public only once in 2022, but through debt instruments.
In the private sector, however, there are already road-sector InvITs launched by developers that have raised money by issuing units through public offers.
With its private InvIT, the NHAI will be able to do two rounds of monetisation in a year through this route. At present, only one issue of InvIT is done in a financial year. Through four rounds of InvIT so far , the NHAI has raised Rs 43,638 crore by monetisation of 2345 km of highways.
According to a strategy paper relased by it, with the changes in ToT monetisation, the NHAI aims to offer three ToT bundles every quarter instead of two. Under the new strategy, one bundle will be smaller with the potential to raise Rs. 2,000 crore, one of medium size to raise Rs. 5,000 crore and one large bundle to mop up Rs. 9,000 crore. This is being done to attract a broad spectrum of investorsd. Till date 11 bundles of highways totalling 2689 km have been monetised through ToT which has brought in Rs 49,000 crore.
“To attract high quality institutional investors and investors with expertise in infrastructure management, NHAI will develop targeted outreach programs across geographic locations and investor profiles,” according to the strategy document.
Through securitisation of road stretches on Delhi-Mumbai the NHAI has further raised Rs 40,000 crore. This takes the overall funds raised through monetisation to Rs 1.4 lakh crore. These funds are being reinvested in developing newer highways while gradually reducing the NHAI’s dependence on the general budget.
“Additionally, private sector participation will bring in advanced technologies and management practices, enhancing the quality and longevity of our road assets and enhancing road user experience,” NHAI Chairman Santosh Kumar Yadav said.
The strategy comes as the government finalises the second National Monetisation Pipeline (NIP) that will aim to raise Rs 10 lakh crore in next five years through transfer of infrastructure assets in sectors like roads, energy, telecom, ports and airports. According to sources the road sector is expected to chip in with Rs 3.5 lakh crore to the total monetisation pipeline target.
Source: The Financial Express
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