NHAI's Invit To Raise ₹9,000 Cr

(MENAFN- Live Mint) "The National Highways Infra Trust (NHIT), the investment trust sponsored by the National Highways Authority of India, plans to raise as much as ₹9,000 crore after Diwali through a mix of debt and equity, two people familiar with the development said infrastructure investment trust's (InvIT's) third round of fundraising, involving the monetization of six 250km highway stretches, will be conducted in phases, targeting domestic and global investors. Additionally, a proposed non-convertible debentures (NCD) issue, the size of which would be similar to last year's ₹1,500 crore, would also be offered to retail investors with assured returns of close to 8%, the people said on the condition of anonymity March, NHIT plans another fundraising to raise ₹5,000-6,000 crore in the fourth phase of asset monetization. These funds will be allocated to six highway stretches spanning 635km, which have been identified by NHAI for the InvIT. These highways are generating around ₹400 crore in annual revenue.“The InvIT is not inviting retail investors in the equity issue in the third round, and this would be considered later after the road projects mature, providing steady revenue streams with increasing traffic, giving an attractive investment opportunity to investors,“ one of the people said managing director and chief executive Suresh Goyal confirmed that the third round of fundraising is expected to start after Diwali.“Subject to approvals and acceptance of the offer by NHAI, the fundraising is expected to be a mix of debt and equity. We expect that our existing 130+ domestic and foreign institutional investors and new investors will participate in the book-build process for equity,” Goyal said.“We could also consider having a bond issue for retail investors post that. The board is expected to consider this in November,” he added without disclosing the size of the bond sale people said the fundraising may have equal debt and equity components, with debt coming from bank loans and the sale of NCDs equity issue, comprising fresh units of the InvIT, may be offered to institutional investors only and could see participation from both domestic and foreign institutions, including large pension funds breakup of the ₹9,000 crore fundraising has still not been worked out, but it may largely be the private placement of units of InvIT as well as bonds and bank loans. NHIT is looking to keep the debt component low, so its size may be smaller third round of fundraising is being done to acquire a bouquet of six road projects of close to 635km, which is already generating an annual toll revenue of over ₹600 crore are instruments, on the lines of mutual funds, that pool money from investors and invest in assets that provide steady cash flows over time. InvITs typically enable infrastructure developers to monetize assets under a single entity (trust structure).NHAI launched its InvIT in October 2021, intending to mop up ₹5,100 crore as part of the government's long-term plans to monetize road assets 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 247km to its InvIT road assets brought under the InvIT had an enterprise value of over ₹8,000 crore. So far, NHAI has raised ₹10,000-11,000 crore via the InvIT route in two rounds. The annual returns from road assets under two rounds are more than ₹850 crore 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 ₹3,800 crore through a follow-on market offer for institutional investors and an NCD issue, which was listed on 28 October. According to Motilal Oswal Financial Services, asset monetization remains a focal point for NHAI, with a list of 46 projects spanning over 2,612km earmarked for monetization in FY24.A lot of these assets will come to NHIT. In fact, after the first round of NHIT fundraising, NHAI indicated that it would offer roads worth 1,500 km to NHIT over three years, NHAI has a project bank of 20,000 km of completed roads, and there are roads where traffic movement has stabilized over time. NHAI offers these roads in bundles and will offer projects worth ₹40,000 crore in the next two financial years total, NHAI aims to generate up to ₹45,000 crore through monetization in FY24, utilizing various funding models, including InvITs and the securitization of road assets constructed by NHAI's special purpose vehicles. Of the annual target, ₹30,000 crore will be through the toll-operate-transfer mode and securitization of toll revenues, while the remaining ₹15,000 crore will be through InvITs form a significant portion of the national monetization pipeline. In 2021, the central government had identified national highway and road assets worth ₹1.6 trillion to be monetized by 2024-25 of the total monetization targets for the same period is ₹6 trillion.

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