The initial public offer (IPO) of public infrastructure investment trust of National Highways Authority of India (NHAI) to raise Rs 6,000 crore opens for bidding on Wednesday that will have around Rs 960 crore worth of units available for retail investors.

Of the total, the NHAI as the sponsor of Raajmarg Infra Investment Trust (RIIT) will take 15% of the units on offer for Rs 900 crore. The strategic investors will be taking 21% of the units with an investment of Rs 1260 crore.

The biggest strategic investor that has come on board is Employee Provident Fund Organisation (EPFO) which will invest Rs 1000 crore for 16.6% of the units. The second strategic investor, the SBI Life Insurance Company, will acquire 4.3% units for Rs 260 crore.

The remaining units will be available for public bidding to raise Rs 3840 crore. Of that total, 75% will be for institutional investors – primarily Indian and rest for retail. Tuesday has been set aside for bidding by anchor investors.

The price band of the issue has been fixed at Rs 99-100 per unit and applications can be made for a minimum of 150 units. This will ensure that retail investors can participate in the IPO with a minimum commitment of Rs 15,000. The last day for application is March 13.

Plans for investment

The Rs 6,000 crore raised through equity and Rs 3800 crore through term loans for banks will be used by RIIT to acquire five highway stretches of 260 km length from NHAI. While the total cost of acquisition will be Rs 9500 crore, the remaining will be utilised for related expenses. In return for the payment, the RIIT will get the right to collect user fee on these highways for 15 years. The 90% of the income from toll collection will be distributed among unitholder every quarter will rest will be retained for expenses.

The road assets that will be acquired through the maiden issue RIIT include 80.52 km long Gorhar–Barwa Adda section in Jharkhand, 69.4 km long Chilakaluripet–Vijayawada section in Andhra Pradesh, 32.6 km long Chennai Bypass, 33 km long Chennai–Tada section in Tamil Nadu and 44.6 km long Neelmangla– Tumkur section in Karnataka.

Over the next 3 to 5 years, NHAI plans to provide further assets of about 1,500 km to RIIT. From NHAI’s private InvT ‘ National Highways Infra Trust – the NHAI has accepted a Rs 6220 crore offer for acquiring two highway stretches. These two transactions will take the funds raised through monetisation of highways through InvIT to Rs 15720 crore..

NHIT has Canada’s CPP Investment Board and Ontario Teachers’ Pension Plan Board through Ontario Ltd as strategic investors since 2021-22. These two funds held 25% units each after four rounds of highway monetisation through NHIT. This year they have pared down their stake to 19.95% each.

When asked whether the RIIT will be the main vehicle for monetisation through InvIT route, NHAI’s Member (Finance) Rajendra Kumar who is also holding the additional charge of Managing Director and CEO of the RIIT said, both these instruments of monetisation through InvIT would work simultaneously.

The second National Monetisation Pipeline that has been prepared for 2026-30 period has set an indicative target Rs 4.52 lakh crore for highways, multimodal logistics parks and ropeways. This is 25% of the total target of Rs 16.72 lakh crore.

So far this financial year, NHAI has raised Rs 12,357 crore from two rounds of monetisation through the Toll Operate Transfer (ToT) mode. A few more ToT bundles are still open for bidding so some more funds can flow through this route this financial year. Another Rs 16.000 to Rs 17,000 crore will come from InvITs.