NHAI InvIT To Monetise National Highway Projects Launched, Attracts Top Canadian Pension Funds As Anchor Investors

The first Infrastructure Investment Trust (InvIT) launched by the National Highways Authority of India (NHAI) has attracted top Canadian funds as its marquee investors.

The NHAI InvIT, which was launched on Wednesday (3 November), is part of the government's long-term plan to monetise road assets. The NHAI has the largest share under the government's National Monetisation Pipeline.

"NHAI is pleased to announce the launch of its InvIT as a mode to monetise road projects. The InvIT will initially have a portfolio of five operating toll roads with an aggregate length of 390 kilometers, with more roads planned to be added later. These roads are located across the states of Gujarat, Karnataka, Rajasthan and Telangana," the Ministry of Road Transport and Highways said in a statement on Wednesday.

"NHAI has granted new concessions of 30-years for these roads," the ministry said.

"In view of the long-term nature of the assets, the units of InvIT were placed with international and domestic institutional investors. The units have been issued under the private placement route under SEBI InvIT Regulations, 2014 at the upper valuation band of Rs 101 per unit. The units will be listed on NSE and BSE," it added.

According to the ministry, the NHAI InvIT attracted two international pension funds, namely Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, as anchor investors, who will hold 25 per cent of the units each.

The balance units were placed with a diversified set of domestic institutional investors comprising pension funds, insurance companies, mutual funds, banks and financial institutions, it said.

"The total enterprise value of the initial portfolio of five roads was pegged at Rs 8,011.52 crore. NHAI InvIT is funding that through debt of Rs 2000 crore from State Bank of India, Axis Bank and Bank of Maharashtra. The balance is being funded by issuing units of Rs 6,011.52 crore to international and domestic institutional investors, and NHAI as Sponsor," the ministry said.

“We are pleased that NHAI InvIT has been able to garner funds from marquee international and domestic institutional investors to support the Government of India’s National Monetisation Pipeline. We welcome the two anchor investors - Canadian Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, and other reputed domestic investors, into NHAI InvIT. The success of this InvIT shall go a long way in achieving Hon’ble Prime Minister’s vision of developing world class infrastructure in the country," said NHAI chairman Giridhar Armane.