NHAI picks advisers for Rs 10,000-crore InvIT IPO

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The National Highways Authority of India (NHAI) has begun appointing advisers to start work on a Rs 10,000-crore IPO of a new highways infrastructure investment trust (InvIT), two people aware of the development told Moneycontrol.

It has picked SBI Capital Markets as the lead financial adviser for the proposed IPO and also appointed law firm JSA as the legal counsel for the deal following a bidding process, sources said.

This will be the first time that the country's premier highways development authority will tap retail investors for its asset monetisation efforts and a second InvIT from NHAI.  Currently, NHAI operates a private InvIT, National Highways Infra Trust (NHIT), which is anchored by global investors CPP Investments and the Ontario Teachers’ Pension Plan.

Moneycontrol was the first to write that NHAI had started the formal process to appoint advisers for the proposed IPO.

They will help NHAI set up the trust, identify the assets to be transferred to it and undertake legal and regulatory work related to the formation of the InvIT. More advisers, including bankers and another law firm, will be added closer to the filing of documents for the share sale, sources said.

Emails sent to NHAI, SBI Capital Markets and JSA had not elicited a response till the time of publication.

InvITs have emerged as a successful asset monetisation route for NHAI, along with the toll-operate-transfer route, helping the state-backed highways development authority to mobilise funds to develop new projects.

The infrastructure trust public offering will add another tool to NHAI’s monetisation strategy, helping it tap a wider pool of investors, including retail investors.

In March, NHAI closed the fourth round of InvIT monetisation, selling road projects worth Rs 18,380 crore, on an enterprise valuation basis, to National Highways Infra Trust, making it the largest such transaction in the Indian roads sector. Across the four monetisation rounds, NHAI has raised over Rs 46,000 crore. NHIT has successfully raised around Rs. 8,340 crore

InvIT IPOs

NHAI’s plans to tap the public market to monetise its projects come as such public offerings of InvITs are gaining momentum, driven by increasing domestic investor demand.

Moneycontrol reported on July 29 that KKR-sponsored Vertis Infrastructure Trust and I Squared Capital-backed Cube Highways InvIT are planning to launch IPOs, which could see them raise around Rs 5,000 crore each.

Recent InvIT IPOs include Capital Infra Trust's Rs 1,578-crore share sale in January and a Rs 2,500-crore worth of shares of Bharat Highways InvIT in February 2024.