According to sources familiar with the matter, the National Highways Infra Trust, an infrastructure investment trust (InvIT) sponsored by the National Highways Authority of India (NHAI), aims to raise up to Rs 7,500 crore through a fresh issue of InvIT units. The funds will be utilized to finance the acquisition of new roads from NHAI.
InvITs are trusts that manage income-generating infrastructure assets, offering investors regular yield and a liquid method of investment in them.
The planned fundraise will facilitate the acquisition of road assets worth Rs 15,600 crore, spread across Assam, Madhya Pradesh, West Bengal, Uttar Pradesh, and Karnataka.
NHAI is collaborating with investment banks SBI Capital Markets, Axis Capital, and ICICI Securities for the proposed fundraise, expected to conclude by the middle of the month.
NHAI, holding nearly an 18 percent stake in the InvIT, plans to contribute Rs 1,400-1,500 crore as sponsor commitment. The remaining capital will be sourced from existing and new investors, with a significant portion anticipated from CPP Investments and Ontario Teachers’ Pension Plan (OTPP), both existing shareholders in the InvIT, collectively holding about 50 percent stake.
Approximately Rs 2,000 crore is expected to be raised from domestic institutional investors such as insurance and mutual funds, corporate treasuries, and family offices.
NHAI InvIT Portfolio: The InvIT currently possesses road assets spanning 636 km acquired through two packages from NHAI, with an enterprise value of Rs 11,711.8 crore.
NHAI established its roads InvIT in 2021 to monetize its extensive portfolio of assets and raise funds for constructing new highways. In its initial offering, NHAI raised Rs 6,011 crore through its InvIT, with Canadian pension funds CPP Investments and Ontario Teachers’ Pension Plan each acquiring 25 percent as anchor investors.
NHAI employs various routes such as outright sale of toll concessions under the toll-operate-transfer (ToT) model, toll securitization, and the InvIT to monetize assets.
InvITs, particularly those focused on highways, have become a favored structure for investors to hold operating infrastructure assets. Private equity investors and construction companies have set up road InvITs in recent years, capitalizing on the popularity and potential of such assets in the market.
