NHAI Launchs 1st Government-Sponsored InvIT

India’s first government-sponsored Infrastructure Investment Trust (InvIT) could be operationalized by March this year. Around six road assets worth Rs 5,000 crore have been given in-principle approval for transfer to the InvIT. We are hoping that the InvIT should be

BY Realty Plus
Published - Saturday, 09 Jan, 2021

NHAI Launchs 1st Government-Sponsored InvIT

India’s first government-sponsored Infrastructure Investment Trust (InvIT) could be operationalized by March this year. Around six road assets worth Rs 5,000 crore have been given in-principle approval for transfer to the InvIT. We are hoping that the InvIT should be operational by March end. There are five to six projects which are operational, and we have a good revenue stream, which will be transferred to the InvIT. The National Highways Authority of India (NHAI), which received approval from the Union cabinet to float the InvIT in December 2019, is in the process of legal vetting of the financing instrument. NHAI has been actively working on setting up an InvIT to monetise its completed and operational national highways projects with the objective of mobilising additional resources through capital markets. InvITs are popular among investors of long-term revenue-generating assets like toll roads and power-transmission projects. These enable a large number of investors to pool their money for investments into operational infrastructure assets in return for regular dividends. Since the operating infrastructure assets provide stable and long term yields under the InvIT structure, global investors have been keen on such entities floated by domestic entities. Assets to be transferred to the InvIT include the 32.6 km Kotha-Kata Bypass to Kurnool (Telangana), the 75 km-long Palanpur-Abu Road in Gujarat, the 31 km-long Abu Road-Swaroopganj in Gujarat, the 160 km Chittorgarh Kota and Chittorgarh Bypass in Rajasthan, and the 77 km Maharashtra-Karnataka border to Belgaum. The 32.6 km-long Chennai Bypass may also be part of the InvIT, which could be replaced by a new stretch. NHAI has appointed veteran banker B Sriram as the chairman of its investment manager company National Highways Infra Investment Managers Pvt Ltd (NHIIMPL). Sriram was earlier managing director of IDBI Bank Ltd and managing director at State Bank of India (SBI).