The National Highways Infrastructure Trust (NHIT) promoted by National Highways Authority of India (NHAI) will raise around Rs 15,000 crore through a mix of debt and equity for acquisition of the next round of assets in the next two months, a senior official said.
The debt will be raised from the banks and financial institutions. The plan to borrow some part of the funds for acquisition of assets through sale of bonds to the public has been shelved.
Earlier the NHIT had expressed its intention to raise Rs 3,000 from the public this year. “The public issue of bonds will now come in the next financial year,” the official who did not wish to be named said.
The NHIT had done its first public issue of bonds in October 2022 raising Rs 1500 crore. This money was used to acquire highway assets worth Rs 2850 crore. After that there has been no public fund raising by the trust..
Apart from terms loans and non-convertible debentures, the NHIT will also explore raising funds through zero coupon bonds. The funds raised through these zero coupon bonds could be in the range of Rs 500 crore to Rs 1,000 crore.
The equity part of the fundraising will be through the subscription of fresh units of the infrastructure investment trust. In the past the sponsor and earlier backers of NHIT have subscribed to the fresh units in proportion to their shareholding.
NHAI, which is the sponsor of the trust, holds 15.48% of units while Canadian funds Ontario Limited and CPP Investment Board Private Holdings Inc. hold 25% each. SBI Balanced Advantage Trust is the other major shareholder with 4.8% units.
The next round of acquisition of assets will be the fourth round by NHIT where it will take over identified operational road assets from NHAI after a payment of an upfront fee. In lieu of that fee the NHIT will get the right to collect toll revenues on the road stretches for 20 years.
For the smooth completion of the fourth round the board of NHIT has approved extension of the tenure of Managing Director Suresh Goyal till the end of this financial year. Goyal had earlier expressed his desire to step down by October-end but was asked to stay on till December-end.
In the fourth round the NHAI has identified 12 road stretches to be monetised through the InVIT route. Total length of these highways is over 850 km and are spread across states of Andhra Pradesh, Chhattisgarh, Rajasthan, Gujarat, Uttar Pradesh and Uttarakhand. Half of the stretches that have been offered to NHIT are in Andhra Pradesh while two are in Chhattisgarh and one each in UP, Rajasthan, Uttarakhand and Gujarat.
In 2023-24 monetisation of 889 km through NHAI brought in Rs 15,700 crore. The yield from monetisation varies for every stretch depending on the traffic volumes and toll collection.
Last year the entire process was completed at one go through ‘InVIT Round 3’ and this time too all 12 stretches would be monetised in a single attempt. This would be the biggest InVIT round for NHAI.
So far, NHIT has acquired 15 road stretches spanning 1525 km spread across nine states of Uttar Pradesh, West Bengal, Assam, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Karnataka and Telangana. Concession period on these roads ranges from 20-30 years.
For the full year NHAI is aiming to raise around Rs 54,000 crore from monetisation of functional road assets through InVIT and Toll Operate Transfer route, and project based financing which will be its highest ever in a year. Around Rs 6661 crore has already been raised through monetisation of two road stretches totalling 251 km through ToT.
For monetisation through ToT and InVIT the NHAI has identified 33 highway stretches with a total length of 2741 km spread all over India for monetisation in 2024-25.