NHAI InvIT to hit market in early September

Proceeds from the asset monetisation programme are used to repay debt and develop highways.

The maiden Infrastructure Investment Trust (InvIT) promoted by the National Highways Authority of India (NHAI), through which it aims to mop up Rs 5,100 crore, is likely to hit the market by the first week of September.

The NHAI InvIT, the second one promoted by a public sector entity after power transmission utility PGCIL, has seen multiple deferments already as NHAI pulled back its marketing exercise for the InvIT as traffic on the national highways fell due to Covid-related restrictions on mobility.

“Traffic has improved a lot on the national highways since June-end. Currently, we are in the marketing phase. Hopefully, NHAI will launch the InvIT by first week of September,” a source said.

Though there were no nation-wide lockdown like last year, widespread curfews and various kinds of severe restrictions amounting to almost a quasi-national lockdown this year has had an immediate effect on the road traffic movement and collection of tolls.

Toll collection through FASTags fell from Rs 3,086 crore in March to Rs 2,777 in April and further to Rs 2,125 crore in May. In June, it recovered a little to Rs 2,576 crore and improved to Rs 2,976 crore in July. Around 96% of the total national highways is currently collected through the electronic route using FASTag.

Market regulator Sebi has approved the draft prospectus submitted by the National Highways Infra Investment Managers (NHIIM), the investment manager which will manage the InvIT.

The units are proposed to be listed on the NSE. Proceeds from the listing shall be utilised for infusion of debt or equity into the projects SPV, National Highways Infra Projects (NHIPPL), for the payment of initial estimated concession value to NHAI and for payment of improvement and repair costs of the five stretches measuring 389 km brought under the SPV. The SPV will collect tolls on these stretches for 30 years.

The trust will acquire 100% of the equity shares of the project SPV from the sponsor NHAI. NHAI may raise further fund, around Rs 5,000 crore, by transferring more assets to the InvIT later in the year.

Apart from InvIT, NHAI has two other means to raise funds by way of asset monetisation – toll-operate-transfer (TOT) model and toll securitisation. NHAI has raised around Rs 17,000 crore through the TOT model so far by granting on long-term lease three bundles out of the five attempted so far.

Proceeds from the asset monetisation programme are used to repay debt and develop highways. As on March, 2021, NHAI had around `3 lakh crore debt. It is permitted to borrow Rs 65,000 crore in 2021-22, same as in 2020-21.