NHAI InvIT raises Rs 7,300 cr from Canadian pension funds CPP Investments, OTPP, others

NHAI InvIT raises Rs7,300 cr from Canadian pension funds CPP Investments, OTPP, others

National Highways Infra Trust, the private infrastructure investment trust (InvIT) sponsored by the National Highways Authority of India (NHAI), has raised close to Rs 7,300 crore from existing investors Canadian pension funds CPP Investments and Ontario Teachers Pension Plan (OTPP) and a host of domestic institutional investors, sources said.

Moneycontrol had first reported on March 4 that the NHAI was planning to raise up to Rs7,500 crore for the InvIT. Spokespersons for the NHAI, CPP Investments and OTPP could not be immediately reached for a comment.

“The NHAI has raised around Rs7,272 crore. The deal was closed on Thursday and the NHAI InvIT board has approved the allotment of new units on Friday,” said one of the sources.

Around Rs 1,090 crore of the mop-up was infused by the NHAI as sponsor commitment to maintain its shareholding level in the InvIT. NHAI holds close to 18 percent stake in the InvIT.

Rest of the capital, about Rs6,182 crore, came from Canadian pension funds CPP Investments and OTPP, which were the biggest participants in this round, and from domestic investors. CPP and OTPP collectively hold around 50 percent in the InvIT.

“Domestic institutional investors such as mutual funds, insurance companies, PSU provident funds and state-run and private bank treasuries invested around Rs 2,500 crore in this round. There was a lot of demand from domestic investors,” the source said.

The fundraise is aimed at funding the acquisition of a portfolio of road assets worth approximately Rs 15,625 crore, spread across the states of Assam, Madhya Pradesh, West Bengal, Uttar Pradesh and Karnataka.

InvITs are trusts that manage income-generating infrastructure assets, which offer investors regular yield and a liquid method of investing in infrastructure assets.

Investment banks SBI Capital Markets, Axis Capital and ICICI Securities advised NHAI on this fundraise.

NHAI InvIT portfolio

The InvIT currently holds road assets with a length of 636 kilometres acquired through two packages from NHAI. The current portfolio of the InvIT has an enterprise value of Rs11,711.8 crore, as per a company presentation.

NHAI had set up its roads InvIT in 2021 to monetize its large portfolio of assets and raise funds to build new highways.

It had raised Rs6,011 crore through its InvIT, which saw Canadian pension funds CPP Investments and Ontario Teachers’ pick up 25% each as anchor investors.

In the first tranche, NHAI transferred five roads projects of 389 kilometres to the InvIT worth Rs8,011 crore on enterprise value.

The initial portfolio of the infrastructure investment trust comprised five road assets spread across Gujarat, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Telangana with a tolling revenue of over Rs460 crore for FY21.

In the second tranche, the NHAI InvIT acquired three road assets of approximately 247 kilometres with an enterprise value of Rs3,787 crore.

NHAI uses various routes for monetisation of its assets such as outright sale of toll concessions under the toll-operate-transfer (ToT) model, toll securitisation and InvIT.