The National Highways Infrastructure Trust (NHIT) on Thursday approved the base price for acquisition of five highway stretches from National Highways Authority of India.
The base price was arrived at based on the report of an independent valuer and conveyed to NHAI in a sealed cover. This will be followed by bookbuilding and then approval of unit holders of NHIT before the road assets can be finally monetised.
The board of the NHIT also approved raising funds for the acquisition. While 50% of the funds would come as equity from existing unit holders, the remaining would come through debt. Debt could be raised through term loans or bonds.
In the second round of acquisition of road assets in October last year, NHIT had raised Rs 1500 crore through the issue of Non Convertible Debentures to the public. The government had then announced that debt raising from the public for monetisation of highways through the InvIT route would become a regular feature.
In the second round NHAI had raised Rs 2850 crore by monetising 246 km of highways through InVIT. 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 so far.
Both Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board hold 25% each in NHAI InvIT while 15.86% is held by NHAI and 9.86% by SBI Balanced Advantage Fund.
Despite political tensions between India and Canada, both the Canadian funds would be participating in the third round of InvIT. The board also approved the names of new nominees of the Canadian funds as directors on the board.
In the third round, NHIT seeks to acquire Gwalior-Shivpuri section (125 km) in Madhya Pradesh, Chichira-Kharagpur (54.4 km) in West Bengal, Orai-Bara (61.1 km) in Uttar Pradesh, Rewa-Katni- Jabalpur-Lakhnadon (280 km) in Madhya Pradesh and Kachugaon Rakhaldubi Bus Junction-Assam; and Rakhaldubi Bus Junction to Kaljhar-Assam (60 km).
The monetisation of five stretches of highways of around 600 km length was to happen in March of 2023 but got delayed as the union budget on February 1 proposed new rules for taxation of infrastructure investment trusts and real estate investment trusts. The clarity on the rules came at the time of passing of finance bill in March-end which led to the transaction being rolled over to this financial year.
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. Overall monetisation target for this year in Rs 45,000 crore.