NHAI InvIT looks to raise up to Rs 8,000 crore from third tranche of road assets

Representative image.

The National Highways Infra Trust (NHIT) is looking to raise around Rs 7,500 crore to Rs 8,000 crore by monetizing the next tranche of six road assets, multiple sources said.

The NHIT which is the infrastructure investment trust of the National Highways Authority of India (NHAI) will take possession of the six road assets by March, a senior government official said.

The NHIT will take possession of roads including the Gwalior-Shivpuri (Madhya Pradesh) of length 125.38 km, Chichira-Kharagpur (West Bengal) of length 56.12 km, and Orai-Bara (Uttar Pradesh) of length 125.806 km by March.

Roads in Rewa-Katni-Jabalpur-Lakhnadon (Madhya Pradesh) of length 306.337 km, Kachugaon-Rakhaldubi Bus Junction (Assam) of length 62.671 km, and Rakhaldubi Bus Junction to Kaljhar (Assam) of length 51.5 km will be given to the NHIT for monetization.

This takes the total length of road assets that are being transferred to the NHIT in March to 727.814 km, whose asset monetization process will start next month.

"The fundraising will be done through a mix of debt and equity including non-convertible debentures (NCD)," an official aware of the development said.

He added that fundraising may have equal debt and equity components with debt coming both from bank loans and NCD issues.

“The InvIT is not inviting retail investors in the equity issue in the third round, and this would be considered later," the government official quoted above said.

He added that the NHIT will target both domestic and foreign institutional investors in this round of fundraising.

NHIT currently controls eight road assets, not including the one mentioned above, of a total length of 637 km. After taking possession of the above-mentioned road assets the NHIT will control road assets of length 1364.814 km.

NHIT's Managing Director and Chief Executive Suresh Goyal had last year told Moneycontrol that in the next three years, NHIT will aim to control 1,900 km of road assets.

NHAI launched its InvIT in October 2021, as part of its plans to reduce market borrowing to reduce its debt and raise money from monetising road assets.

The InvIT acquired five toll road assets of 390km, spread across Rajasthan, Gujarat, Telangana and Karnataka initially. In June last year, NHAI offered an additional three roads aggregating 247 km to its InvIT.

In the first round, money was raised largely from institutional investors, pension funds and global equity investment firms, including CPP Investments and Ontario Teachers’ Pension Fund.

In the second round, NHIT raised around Rs 3,800 crore through a follow-on market offer for institutional investors and an NCD issue which got listed on October 28.

The push for divestment and asset monetization can also be seen by the government's move to set the National Highways Authority of India's Internal and Extra-Budgetary Resources (IEBR) as negligible in 2023-24.

This is the second straight year that the NHAI's market borrowing has been set as negligible.

In 2022-2023, the government had asked the highway developer to limit its borrowings. In the 2022-23 Budget, the government projected that NHAI’s IEBR would fall to around Rs 1 lakh crore, from Rs 65,000 crore in 2021-22.

As per the government's revised estimates, the NHAI had raised Rs 798 crore as IEBR in 2022-23.

According to the National Monetisation Pipeline, the NHAI should look to monetise around 26,700 km of assets by 2024-25.