NHAI InvIT Plans To Raise Rs 10,000 Crore Via Equity, Debt

The National Highways Infra Trust, the infrastructure investment trust of National Highways Authority of India, plans to raise around Rs 10,000 crore through equity and bonds, two people involved in the transaction told NDTV Profit.

The infrastructure investment trust is looking to raise up to Rs 8,000 crore by way of fresh issue of InvIT units and is likely to conclude this transaction by the end of February. It is expected to be raised from domestic institutional investors such as insurance companies, mutual funds, corporate treasuries and family offices, the people said.

Separately, it also aims to raise up to Rs 2,000 crore through two bonds on a private placement basis, a person aware of the development said.

Of the Rs 2,000 crore, NHAI InvIT plans to raise up to Rs 1,500 crore through a 17-year bond issue and Rs 500 crore through a 20-year zero coupon bond, which would have bullet repayment at the end of eighteenth, nineteenth and twentieth year.

Discussion on raising funds through bonds has been going on for sometime now and it may tap the debt market next month, the person said.

Calls and emails sent to NHAI InvIT did not elicit a response at the time of publishing this story.

Last month, CARE Ratings assigned AAA rating to NHAI InvIT's bonds, which will be used for refinancing existing term debt and will not result in additional increase in total debt.

So far, NHAI InvIT has not borrowed anything in the current financial year, another person said, adding that the borrowing is linked to acquisitions of NHAI portfolio. The proceeds of the bond issuances will be used for paying the concession fees to NHAI.

In October 2022, National Highways Infra Trust raised Rs 1,500 crore through a public issue of bonds, which were rated AAA by CRISIL Ratings.

The trust had raised funds through bonds maturing in 13 years, 18 years and 25 years, that had a separately transferable and redeemable principal parts structure.

The infrastructure investment trust is sponsored by NHAI, which monetises national highway projects through the toll-operate-transfer, infrastructure investment trusts, and securitisation routes.

Under the toll-operate-transfer model, NHAI gives toll collection rights and operation and maintenance obligations to private companies in return for an upfront payment of lump sum concession fees.

In the InvIT route, assets are transferred to a trust, which is kind of a collective investment scheme similar to a mutual fund. An InvIT enables direct investment from individual and institutional investors into infrastructure projects to earn a portion of the income as return.