Around half of the asset monetisation programme of the National Highways Authority of India (NHAI) could be done through the infrastructure investment trust (InvIT) this financial year and around Rs 23,000 crore be raised through this route, a senior official said Thursday. If the target is achieved, it will mark a big jump from just Rs 2,850 crore raised via InvIT in FY23.
According to sources, the NHAI has drawn up plans to monetise 46 highway stretches of 2,612 km length in 2023-24 through the InvIT and toll operate transfer (TOT) models.
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“The value of new highway stretches that could be offered for monetisation through InvIT could be around Rs 15,000 crore. This is in addition to Rs 7,000-8,000 crore expected to be raised from 6 stretches being monetised via this route by July. So far, the NHAI has not finalised the new stretches it will offer to NHAI InvIT this year,” a senior official said.
The clarity of which stretches will be monetised through the InvIT this year would only be known by June-end, he said.
Apart from new highways, NHAI InvIT is working on completing monetisation of six highway stretches that were offered to it last year. This will be the third bunch of highways to be monetised through the InvIT and collectively their length is 635 km.
In FY23, 246 km of highway strtetches were transferred to NHAI InvIT and in the year before, 387 km were monetised to raise Rs 7,350 crore.
The split between debt and equity for raising funds for the third tranche is yet to be decided, he said.
For the second tranche NHAI InvIT raised Rs 1,430 through placement of units and Rs 1,500 through debt in the form of Non-convertible Debentures in which both retail investors and institutions could invest.
The government wants to institutionalise debt raising from the public for highway monetisation through InvIT whenever it raises funds. It is also considering allowing retail investors to buy units of InvIT.
Right now, investments in units of InvITs, which are mutual fund-like instruments that pool money for infrastructure, are open to institutions only.
This (retail participation) in InvIT units could be possible after one or two more rounds of fundraising, the official said.
He said investor interest in NHAI InvIT is growing and the number of investors in units has gone up to 130. The net asset value of the unit has touched Rs 116.50 as against the face value of Rs 101.
Asset monetisation in the highway sector is getting a big push as NHAI’s dependence has increased manifold after it was barred from the debt market. The total debt of NHAI has touched Rs 3.48 trillion. Its interest servicing cost comes to 18% to 20% of the allocation from the budget.
Monetisation will make more funds available to NHAI as it takes on a higher burden of highway development because the private sector has retreated from the sector.