While India and Canada may spar on the political and diplomatic front, Canadian investment funds Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board are expected to continue their support for the highway monetisation programme by maintaining their holding in National Highways Infra Trust (NHIT) at 50% as it goes on to acquire new highway stretches from National Highways Authority of India (NHAI).
Till the end of this financial year, NHIT has identified for takeover of 12 highway stretches of 985 km length from NHAI which could require a total investment of Rs 13,000 crore. The amount would be raised in a mix in debt and equity and the existing shareholders are expected to maintain their level of holdings. In acquisitions through InvIT, 51% of the funds typically come from equity and 49% from debt. NHAI being the sponsor of NHIT subscribes to units to maintain its stake of at least 15%.
“We feel the current investors will continue their support (for the next rounds of InvITs),” a senior official who did not wish to be named told FE.
Both Ontario and CPP hold 25% each in NHAI InvIT while 15.86% is held by NHAI and 9.86% by SBI Balanced Advantage Fund at the end of March 2023. Ontario Teachers has an investment of $3 billion in India across infrastructure, healthcare and renewables. CPP had much deeper engagement with India and has picked up stakes in top companies and other investment vehicles including Power Grid InvIT.
While the third round of InvIT issue is pending since March, the NHIT has identified six more stretches for monetisation in the fourth round.
In the third round six highway stretches of 635 km length would be monetised by NHAI which could fetch around Rs 7000-8000 crore.
The board on NHAI InvIT will meet in the first week of November to give their approval for the third round of highway asset acquisition. “For fund raising (for the third round) the board will meet after Diwali,” the official said.
The NHAI InvIT is also preparing for the fourth round of asset monetisation by March. The NHAI has identified six highway stretches, mainly in Karnataka, for monetisation through InvIT. The total length of the highways on offer in the fourth round is 350 km and could bring in a total of around Rs 5000 crore.
The highways that will be monetised in the fourth round of InvIT are Lakhnadon-Mohgaon (74 km), Mohgaon-Khawsa (43 km), Hubli-Haveri (62 km), Haveri-Davangere (71 km), Davangere-Chitradurga (72 km) and Kaljhar-Patacharkuchi (27 km).
For the full 2023-24 the NHAI expects to raise around Rs 10,000 to Rs 15000 crore by monetisation through InVIT.
Last financial year Rs 2850 crore was raised by monetising 246 km of highways through InVIT while in the year before that 387 km stretches were transferred to NHAI InvIT for Rs 7350 crore. In all Rs 10200 crore has been raised by monetisation through InvIT.