Reliance Infra's Rs 3,000-cr InvIT fund gets NHAI approval

Reliance Infrastructure InvIT Fund, which is planning a Rs 3,000-crore issue next month, has become the first to get approval from the National Highway Authority (NHAI), according to sources.

The RInfra InvIT Fund, with a proposed issue size of Rs 3,000 crore with an option to retain over-subscription of up to 25 per cent, will own 10 toll road assets, with an option to acquire further assets in future.

These assets cover 770 km of national highways across five states. Last November, the fund had secured a certificate of registration from the Sebi following which it filed the draft red-herring prospectus with the markets watchdog in December.

RInfra has a portfolio of 11 road projects with total length of around 1,000 km on build, operate and transfer basis. It also provides engineering, procurement and construction services for developing road projects.

After going bullish for a long period, RInfra quit the road segment in 2015 as it found land acquisition was a tough task. Since then it has not bid for any road projects until last week when it became the lowest bidder for Rs 800-crore NHAI order in Tamil Nadu on an EPC model.

The proposed InvIT fund issue is in line with the government initiative to promote alternative means for long- term infra financing. The InvIT fund offers investment opportunity in a portfolio of income-generating assets in key growth markets.

The fund will have low leverage upon listing, providing debt capacity to finance future growth. While Reliance Nippon Life AMC is the investment manager to the fund, Axis Capital, DSP Merrill Lynch, UBS Securities are acting as global coordinators and book running lead managers and SBI Caps and Yes Securities are book running lead managers.