The NHAI InvIT will initially have a portfolio of five operational toll roads with a total length of 390 kilometres and more roads will be added later.
The maiden infrastructure investment trust (InvIT) by the National Highways Authority of India (NHAI) sailed through by raising Rs 6,000 crore with the participation of two Canadian pension funds, LIC and domestic banks.
The two Canadian pension funds — Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board — have invested around Rs 3,000 crore.
This is the second such InvIT sponsored by a public sector organisation. In April, power transmission utility PGCIL sponsored PGlnvlT to raise about Rs 3,800 crore.
InvIT is a business trust (like REIT), registered with the market regulator, which owns, operates, and manages operational infrastructure assets. These long-term revenue-generating infrastructure assets generate cash flows and then this is distributed to the unit holders periodically.
The NHAI InvIT will initially have a portfolio of five operational toll roads with a total length of 390 kilometres and more roads will be added later. These roads are located across Gujarat, Karnataka, Rajasthan and Telangana. The NHAI has granted new concessions of 30 years for these roads.
“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 at the upper valuation band of Rs 101 per unit,” the NHAI said.
The two Canadian pension funds, as anchor investors, will hold 25 per cent of the units each. The balance units were placed with a set of domestic institutional investors comprising pension funds, insurance companies, mutual funds, banks and financial institutions.
The total enterprise value of the initial portfolio of five roads was pegged at Rs 8011.5 crore. NHAI InvIT is funding this through debt of Rs 2,000 crore from State Bank of India, Axis Bank and Bank of Maharashtra.
The balance is being funded by issuing units of Rs 6,011.2 crore to international and domestic institutional investors, and NHAI as sponsor.