A Canadian pension fund, Life Insurance Corporation (LIC) and National Infrastructure Investment Fund (NIIF) have shown interest to invest in the proposed infrastructure investment trust (InvIT).
Over two dozen global and domestic investors have indicated their willingness to invest in the InvIT during a meeting held last week, the Business Standard reported.
Moneycontrol could not independently verify the report.
The infrastructure investment trust (InvIT), to be floated by the National Highways Authority of India (NHAI), will be the first government-firm-promoted InvIT in the country.
The Cabinet, chaired by Prime Minister Narendra Modi, gave its approval to the Ministry of Road Transport and Highways in December 2019, authorising NHAI to set up an InvIT as per guidelines issued by SEBI.
The NHAI set up a search-cum-selection committee in July 2020 for the post of chairman and two independent directors for its Investment Manager Board.
National Highways Authority of India (NHAI) Chairman Sukhbir Singh Sandhu was appointed as the convenor of the committee. Other members include Deepak Parekh, chairman, Housing Development Finance Corporation; Girish Chandra Chaturvedi, chairman, ICICI Bank; and Sanjay Mitra, ex-secretary, Ministry of Road Transport and Highways.
InvITs are instruments that work like mutual funds and are designed to pool small sums of money from a number of investors to invest in assets that generate cash flows over a period of time.
InvIT as an instrument provides greater flexibility to investors and is expected to attract patient capital (for say 20-30 years) to the Indian highway market, as these investors are averse to construction risk and are interested in investment in assets which provide long-term stable returns, as per the government.
It will also facilitate retail domestic savings and corpus of special institutions (such as mutual funds, and PFRDA) to be invested in the infrastructure sector through InvIT.
NHAI's InvIT will be a trust established by NHAI under the Indian Trust Act, 1882 and Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014.