The bidding process for the fifth round of monetisation through infrastructure investment trust (InvIT) route by the National Highways Authority of India (NHAI) will start by the end of this month. The process may yield Rs 7,000-8,000 crore to the NHAI.
Following the completion of this round, the work will begin for another round of monetisation through InvIT mode but this time through Public InvIT.
The fifth round will be conducted through private InvIT – the National Highways Infrastructure Trust (NHIT) – sponsored by NHAI. The two biggest investors in the NHIT are Canadian funds – Ontario Teachers Pension Plan Board Ltd and Canadian Pension Plan Investment Board Private Holdings Inc – holding 25% units each.
Unit holders other than NHAI and Canadian funds are mutual funds, pension funds, Employee Pension Fund Organisation (EPFO) and state government funds.
The money raised through round five of InvIT will be half of what has been raised through this route in the past three financial years. In 2024-25 the NHIT had acquired 821 km of highways from NHAI after an upfront payment of Rs 17738 crore. This year’s target for fund raising through InvIT is Rs 15,000 crore so the remaining part will be contributed by the public InvIT.
Public InvIT will enable retail investors to subscribe to the units or equity not just debt. Last time funds were raised from the public for InvIT in 2022 as debt through the issuance of Non Convertible Debentures (NCD). The debentures have performed well in the market and are giving an effective return of 8.01%.
Details of the public InvIT are being worked out and it is expected that its sponsor too will be NHAI. Other anchor investors and details are being worked out by the government.
Through public InvIT the government wants to give retail investors access to infrastructure assets that provide reliable returns over a long period of time, It will also develop a competitive environment in the InvIT market, and mitigate the risk of a limited investor base.
So far 2,345 km of road assets have been monetized through InvIT to raise Rs. 43,638 crore. In the fifth round that will begin in the next few weeks, NHAI has identified nine road stretches with a total length of over Rs 550 km for monetisation. The road assets that will be monetised are in states of Maharashtra, Odisha, Andhra Pradesh and West Bengal.
For this year the target of Rs 40,000 crore has been kept for fund raising through highway monetisation. Apart from Rs 15,000 through InvIT, a similar sum will be raised through Toll Operate Transfer (ToT) mode. The remaining will come from project based financing or securitisation.
For 2025-26 the NHAI has identified 24 road assets with a total length of 1472 km for monetisation through ToT and InvIT..