NHAI will launch its first Infrastructure Investment Trust (InvIT) in April next fiscal with an aim to mop up Rs 4,000-5,000 crore, its chairman Sukhbir Singh Sandhu said. NHAI feels that InvIT, along with the monetisation of operational assets via the toll-operate-transfer model and toll securitisation, would help boost non-debt resources.
“We are targeting to launch our first InvIT within April 15. We will file the memorandum with the Securities and Exchange Board of India (Sebi) before March end,” Sandhu told.
The Cabinet had in December 2019 authorised NHAI to launch InvITs to enable it to monetise national highways that have a toll collection track record of at least one year. The proposed trust may hold assets either directly or via an SPV.
Essentially, InvITs, akin to mutual funds, will help mobilise funds from various classes of investors, who seek to stay invested for relatively long periods and expect dividend income during the investment period.
Stating that monetising operating public infrastructure assets is a very important financing option for new infrastructure construction, finance minister Nirmala Sitharaman in her Budget speech for 2021-22 said that five operational roads with an estimated enterprise value of Rs 5,000 crore were being transferred to the NHAI InvIT.
NHAI has a mandate to develop 34,800 km (including 10,000-km residual NHDP stretches) highway projects under the first phase of Bharatmala Pariyojana, with an estimated outlay of Rs 5.35 lakh crore. It has the huge task of accelerating the pace of highway construction while private investments continue to be low.
NHAI also needs additional funds as it is awarding the lion’s share of the projects though the engineering, procurement and construction (EPC) route, where it is to bear all the expenses. It is in dire need of funds to finance its burgeoning debt which reached at Rs 2.7 lakh crore as in November, 2020.
In the Budget for 2021-22, NHAI has been given a budgetary support of Rs 57,350 crore, up from Rs 49,050 crore (revised estimate) for 2020-21. It has also been granted the nod to raise Rs 65,000 crore from the market, same as in 2020-21. Asset monetisation, which has been pegged at Rs 10,000 crore for 2021-22, is critical for NHAI to meet its construction targets.
In the Budget, NHAI was allowed to monetise a dozen highway bundles with a length of 6,000 km for monetisation. Experts say such monetisation exercise, including through InvITs, securitisation of toll receipts and TOT routes, could fetch around Rs 60,000 crore.