NHAI InvIT Scraps Rs 1,400-Crore Bond Issue Due To Underwhelming Response

The National Highways Infra Trust scrapped its Rs 1,400-crore bond issue due to high interest rates as it did not receive a good response from investors, according to three persons aware of the matter.

The infrastructure investment trust of the National Highways Authority of India was demanding a very low coupon rate, but investors were only willing to pay at a higher rate, one of the persons told NDTV Profit on Tuesday on the condition of anonymity.

The issuer, which received 33 bids for a coupon in the range of 7.15–7.79%, was expecting the 17-year bond to be issued at a coupon of 7.30–7.40%, according to the bid book accessed by NDTV Profit.

The issuer-investor mismatch led the company to withdraw its bond issue that came after a hiatus. The issue had a base size of Rs 700 crore and a greenshoe option of Rs 700 crore.

This development has come as the company has been trying to tap the debt market for sometime now. The last time the National Highways Infra Trust had tapped the debt market was in October 2022, when it raised Rs 1,500 crore through a public issue of bonds 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 the NHAI, which monetises national highway projects through the toll-operate-transfer, infrastructure investment trusts and securitisation routes.

Under the toll-operate-transfer model, the 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.