The National Highways Authority of India (NHAI) has identified nine road stretches with a total length of over 550-km for monetisation through the Infrastructure Investment Trust (InvIT) route in the current financial year, according to official sources.
The road assets, which will be monetised through National Highways Infrastructure Trust (NHIT), are in states of Maharashtra, Odisha, Andhra Pradesh and West Bengal. This will be the fifth round of monetisation through InvIT since the launch of this mode in 2021-22.
Every year one round of InvIT has been done but this year there could be two issues. The Asset Monetisation Strategy document does talk of having more than one round in InvIT per year.
Minister of Road Transport and Highways Nitin Gadkari had recently said that the government will be relying more on InvIT and phase out Toll Operate Transfer (ToT). With ToT no longer favoured, the NHAI is yet to decide the concessionaires of two highway bundles for which the bids had come last financial year. Apart from these two bundles, the bids are currently open for two more ToT bundles.
The size of the fifth round of InvIT has been kept lower than what was achieved in the last financial year. The process has also been kicked-off early in the financial year to give space to another round of monetisation through InvIT.
In 2024-25 the NHIT had acquired 821 km of highways from NHAI after an upfront payment of Rs 17738 crore. The back of the envelope calculations suggest that the next round of monetisation through InvIT would bring in Rs 12,500 crore.
So far the NHAI has raised Rs 43,638 crore by monetisation of 2345 km of highways through this route. Apart from NHIT – a private InvIT sponsored by NHAI there is a proposal to launch a public InvIT. In public InvIT retail investors will be able to subscribe to the equity which is in the form of units. The NHIT has raised funds from the public only once in 2022 through debt instruments.
If the ToT is discontinued, then InvIT would be the sole mechanism that will be available to meet the ambitious monetisation targets of the second National Monetisation Pipeline The pipeline will have a list of assets that will be monetised over the five-year period starting 2025. The potential receipts from the second pipeline has been pegged at Rs 10 lakh crore. Of the total the highway sector is expected to contribute Rs 3.5 lakh crore.
This will require the NHAI to monetise assets of over Rs 50,000 crore every year for the next five years.