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NHAI files draft prospectus for first InVIT; plans to raise at least 5,100 cr

On similar lines, the NHAI has been selling toll concessions of operating roads to financial investors under the toll-operate-transfer modelPremium
On similar lines, the NHAI has been selling toll concessions of operating roads to financial investors under the toll-operate-transfer model

  • The InvIT is part of NHAI’s plans to mobilize resources by unlocking value in operational road assets
  • While PowerGrid is planning an IPO of its InvIT, NHAI’s InvIT is going to be a privately placed one

Mumbai: The National Highways Authority of India (NHAI) on Monday filed draft papers with markets regulator Sebi to set up an Infrastructure Investment Trust (InvIT) to raise 5,100 crore.

NHAI plans to mop up a total of 5,100 crore through fresh issue, as per the draft papers filed with the Securities and Exchange Board of India (Sebi). In addition, there would be an offer-for-sale.

An infrastructure investment trust is a quasi debt instrument that provides investors with a steady yield derived from cashflows from operating infrastructure projects such as roads, transmission lines or renewable energy projects.

The InvIT is part of NHAI’s plans to mobilize resources by unlocking value in operational road assets. On similar lines, the NHAI has been selling toll concessions of operating roads to financial investors under the toll-operate-transfer (TOT) model.

Earlier, in January, another state unit PowerGrid Corp of India Ltd filed the draft paper for the initial public offering of its InvIT through which it aims to raise as much as Rs8,000 crore through both primary and secondary share sales, Mint reported on 27 January.

While PowerGrid is planning an IPO of its InvIT, NHAI’s InvIT is going to be a privately placed one.

While Sebi notified regulations for InVITs and REITs (Real Estate Investment Trusts) in 2014, only a few such trusts have listed their units in the country so far. It is widely expected that InvIT offerings by high quality sovereign backed institutions such as the NHAI and PowerGrid would give a boost to this category, attract long term patient foreign capital and help infrastructure companies mobilize resources for building new projects.

In May 2017, road developer IRB Infrastructure Developer Ltd launched the first IPO for an infrastructure investment trust—IRB InvIT Fund—raising 5,033 crore. Transmission projects developer Sterlite Power Grid launched the IPO of its infrastructure investment trust—India Grid Trust—raising 2,250 crore.

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