LIC, EPFO to invest in NHAI’s maiden InvIT

By: |
October 29, 2021 4:45 AM

The equity value of the stretches is Rs 6,000 crore. As per the Sebi rule, the promoter NHAI will have to retain 15% stake for a lock-in period of three years. As per the rule, an entity cannot subscribe more than 25% of the offering.

The stretches, part of NH-27, NH-44 and NH-48, are spread across Gujarat, Rajasthan, Karnatka, Maharashtra, Telengana and Andhra Pradesh.The stretches, part of NH-27, NH-44 and NH-48, are spread across Gujarat, Rajasthan, Karnatka, Maharashtra, Telengana and Andhra Pradesh.

Life Insurance Corporation of India (LIC) and Employees’ Provident Fund Organisation (EPFO) together are likely to invest between Rs 600 and Rs 700 crore in NHAI’s maiden infrastructure investment trust (InvIT) scheduled for launch on October 29.

The National Highways Authority of India (NHAI) plans to raise Rs 5,100 crore through the exercise that will remain open for subscription for institutional investors till November 2. Retail investors are not allowed to take part. The InvIT will be listed in both the BSE and NSE. The InvIT will hold five stretches with a cumulative length of 389 km. The stretches, part of NH-27, NH-44 and NH-48, are spread across Gujarat, Rajasthan, Karnataka, Maharashtra, Telangana and Andhra Pradesh.

The equity value of the stretches is Rs 6,000 crore. As per the Sebi rule, the promoter NHAI will have to retain 15% stake for a lock-in period of three years. As per the rule, an entity cannot subscribe more than 25% of the offering. The minimum bid amount has been fixed at Rs 26 crore.

A source in the NHAI said the InvIT will have Canadian pension funds as anchor investors. Apart from EPFO and LIC, domestic financial institutions including private insurance companies, mutual funds and banks are likely to subscribe the issue.

Proceeds from the listing shall be utilised for infusion of debt or equity into the projects SPV, National Highways Infra Projects (NHIPPL), for the payment of initial estimated concession value to NHAI and for payment of improvement and repair costs of the five stretches.

The SPV will collect tolls on these stretches for 30 years. The trust will acquire 100% of the equity shares of the project SPV from the sponsor NHAI.

The NHAI InvIT is the second one to be sponsored by a public sector entity. In April, power transmission utility PGCIL sponsored PGlnvlT to raise about Rs 3,800 crore. SBI Capital Markets, ICICI Securities and Kotak Mahindra Capital Company are the lead managers for the NHAI InvIT; while KFIN Technologies will act as the registrar and unit transfer agent.

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