MC EXCLUSIVE Centre may soon clear NHAI’s public InvIT plan to speed up highway monetization

NHAI’s existing InvITs – launched in 2021 and 2022 – were privately placed

Centre is likely to soon approve the National Highways Authority of India’s (NHAI) proposal to launch its first public Infrastructure Investment Trust (InvIT) to tap into a wider investor pool and unlock higher, upfront revenue from completed highway assets.

A meeting of the Committee of Secretaries (CoS), chaired by Cabinet Secretary TV Somanathan, was held in New Delhi earlier this week to examine the proposal, one government official familiar with the development told Moneycontrol.

“A committee of secretaries reviewed the proposal earlier this week to authorise NHAI to create a publicly listed InvIT for monetising its completed and operational highway stretches,” the source said, adding that discussions centred about the structure, governance framework and operational modalities required for the proposed InvIT.

Deepening Infrastructure Financing

NHAI’s existing InvITs - launched in 2021 and 2022 - were privately placed instruments restricted to institutional investors such as Canadian pension funds and domestic mutual funds. A public InvIT would be listed on stock exchanges and available for retail participation, thus significantly widening the investor base.

Sources familiar with the matter said the government views a public InvIT as a critical tool to broaden market participation, reduce dependence on budgetary support and strengthen NHAI’s ability to recycle capital.

“A public InvIT can bring retail, high-net-worth and domestic institutional investors into the asset monetisation cycle, deepening India’s infrastructure financing ecosystem,” the official said. “Given the stable cash flows of NHAI’s operational road assets, the trust structure is well suited for retail-facing investment,” he added.

A public InvIT is also expected to generate higher upfront proceeds, depending on the size and composition of the first tranche of road assets on offer.

Once the government grants approval, NHAI will begin identifying the initial bundle of completed and toll-operational highway stretches that could be transferred to the public trust.

If the plan goes through, this would be India’s first, large-scale public InvIT from the roadways sector, setting the stage for a sequence of future monetisation rounds aimed at scaling up the Centre’s asset recycling programme.

What is a Public InvIT?

An Infrastructure Investment Trust (InvIT) is a financial vehicle that owns income-generating infrastructure assets and distributes returns to investors. A public InvIT is listed on stock exchanges and can be subscribed to by retail investors, unlike a private InvITs which are limited to select institutional participants. Public InvITs are regulated by the Securities and Exchange Board of India (Sebi) and must adhere to strict disclosure, valuation and distribution norms.