Home / Companies / News /  NHAI InvIT looks to raise up to 2,000 crore  to  buy  road  assets

MUMBAI : The infrastructure investment trust (InvIT) set up by National Highways Authority of India (NHAI) is planning to raise 2,000 crore from investors to acquire two to three road assets from its parent, two people aware of the development said. The InvIT, which was set up last year, counts CPP Investments and Ontario Teachers’ Pension Fund as its investors.

InvITs are trusts that manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects. NHAI had set up its first roads InvIT to monetize its large portfolio of assets and raise funds to build highways. It had raised 6,000 crore through its InvIT, which saw CPP and Ontario Teachers’ pick up 25% each as anchor investors.

“NHAI is planning to transfer 2-3 new road assets to the InvIT and, for this, they are planning to raise fresh funds of 1,500-2,000 crore. NHAI plans to reach out to new investors including other Canadian pension funds as well as domestic institutional investors for the fundraise, which is expected to be launched next month," said one of the two people cited above, who spoke on condition of anonymity.

The initial portfolio of the infrastructure investment trust comprised five road assets spread across Gujarat, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Telangana with an aggregate length of 390km, and tolling revenue of over 460 crore for FY21. The enterprise value of the portfolio stood at 8,011.5 crore.

An email sent to NHAI on Tuesday remained unanswered till press time.

“For global investors such as pension funds which want to invest large sums of capital in long-term yield generating assets, Indian infrastructure is a very attractive opportunity. These investors are looking to deploy large cheques in roads and renewable assets in India, and InvITs have become a popular investment route for them," the second person said also seeking anonymity.

InvITs have emerged as a preferred structure for investors, which are being set up to hold operating projects across roads, transmission lines, renewable projects, telecom towers and gas pipelines.

Mint reported in June that roads platform Cube Highways is in talks with Canadian pension fund British Columbia Investment Management Corp. and Abu Dhabi-based sovereign wealth fund Mubadala to raise $1 billion for its infrastructure investment trust.

Another Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) is seeking investors to raise around 1,000 crore for its Indian roads infrastructure investment trust, Mint reported on 1 June.

ABOUT THE AUTHOR

Swaraj Singh Dhanjal

" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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