New Delhi: State-owned NHAI on Monday said it plans to launch a public Infrastructure Investment Trust (InvIT) to increase the overall investor base. Further, NHAI said public InvIT will also cater to retail investors, thereby providing access to infrastructure assets. NHAI had launched a private InvIT and monetised over 2,300 km of highways.
An InvIT is a pooled investment vehicle that raises funds from investors by issuing units. Specifically, NHAI said it aims to offer three Toll-Operate-Transfer (ToT) bundles per quarter – one small (Rs 2,000 crore), one medium (Rs 5,000 crore), and one large (Rs 9,000 crore) – and to conduct one/two InvIT phases each year to cater to a broad spectrum of investors.
“NHAI will also assess the market conditions in future and adjust the bundle size accordingly,” it added. To attract high-quality institutional investors and investors with expertise in infrastructure management, NHAI said it will develop targeted outreach programmes across geographic locations and investor profiles.
NHAI said it has successfully awarded 11 ToT bundles and three phases of InvIT bundles for a combined Rs 75,000 crore from 2017-2018 till date. The ToT Model is structured to attract private capital for management of completed assets, in exchange for toll collection rights.
To gain these rights, the concessionaire needs to pay a lump sum amount to NHAI at the start of the concession and also undertake O&M obligations for the asset over the duration of the concession period.
Introduced in India in 2014, InvIT is an innovative financing mechanism that offers stable and predictable cash flows, low risk, liquidity, diversification, and tax benefits to investors. Infrastructure asset owners use InvITs to pool funds from a diverse set of investors, who receive cash flow generated by the assets periodically. InvITs are regulated by Securities and Exchange Board of India (Sebi).
