NHAI InvIT raises Rs 1217 crore in follow-on offer

4 Oct 2022 , 09:20 AM

The ministry of road transport and highways (MoRTH) stated on Monday that the National Highways Infra Trust, the infrastructure investment trust (InvIT) of the National Highways Authority of India (NHAI), has received Rs1,217 crore from investors in its follow-on offer.

Before the offer closed, it was completely subscribed, with NHAI contributing Rs213 crore of its own investment, according to MoRTH. There is presently no information available on which institutional investors have been participating in the most recent issuance, despite the ministry’s plans to increase its investor pool.

The most recent problem is the addition of three toll roads to InvIT’s present portfolio: the Borkhedi-Kelapur length in Maharashtra, the Shivpuri-Jhansi stretch in Madhya Pradesh, and the 32.8 km long Agra Bypass route in Uttar Pradesh (138.15 km).

Approximately Rs3500 crore is the enterprise value of these assets, according to a source with knowledge of the situation. Additionally, the InvIT submitted a draught prospectus to the Securities and Exchange Board of India (Sebi) in order to raise Rs1500 crore through the issuance of non-convertible debentures.

The InvIT will increase the remaining enterprise value by borrowing 850 crore rupees in long-term debt. Earlier, when the first round of InvITs was issued and funded by State Bank of India, Bank of Maharashtra, and Axis Bank, the highway authority’s trust also raised Rs2,000 crore.

CPP Investments and the Ontario Teachers’ Pension Fund invested in the InvIT last year for a total of Rs8011 crore. InvITs are financial products that let investors get immediate financial gain from sound infrastructure assets that generate revenue, such as toll highways.

Nitin Gadkari, a union minister, has proposed a plan to make the NHAI InvIT available to individual investors with an assured return of 7-8% annually. In order to simplify the investment regulations and permit a public listing, MoRTH is now discussing with SEBI the required permissions and structural changes. A ceiling of Rs10 lakh per investor was previously announced by the ministry.

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