NHAI concludes its largest InvIT Monetization, raises over Rs 16,000 crore in ‘Round 3’

National Highways Authority of India’s infrastructure Investment Trust, National Highways Infra Trust (NHIT), has successfully concluded its fund-raising through ‘InvIT Round-3. This round secured financing for national highway stretches totaling 889 kilometers, with an Enterprise Value surpassing Rs 16,000 crore.

This marks NHAI’s largest monetisation endeavor and stands as one of the most substantial transactions in India’s road sector history. The issuance of the Letter of Acceptance (LOA) for raising the highest-ever concession value through ‘InvIT Round-3’ occurred in February 2024.

In the third monetization round, NHIT has secured approximately Rs 7,272 crore in unit capital from marquee domestic and international investors. Additionally, it obtained debt totaling around Rs 9,000 crore from Indian lenders

. These funds are earmarked for acquiring National Highway stretches, with a base concession fee estimated at around Rs 15,625 crore and additional concessional fees of Rs 75 crore. Investors subscribed to the units through a book build process at a cutoff price of Rs 124.14 per unit, representing a premium over the current Net Asset Value (NAV) of Rs 122.86 per unit.

The units saw a strong demand from both existing and new investors, including foreign pension funds such as the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board.

These foreign pension funds, being existing unitholders, subscribed to the maximum limit of 25% each. Additionally, domestic pension and provident funds (such as IOCL Employee’s PF, L&T Staff PF, Rajasthan Rajya Vidyut Karamchari Pension Fund, SBI Pension, etc.), insurance companies (Tata AIG, SBI Life, HDFC Life), mutual funds (SBI, Nippon India), banks, and several others participated in the subscription. NHAI itself subscribed to approximately 15% of the units at the same price.

With the conclusion of the third monetisation round, the total realized value of all three rounds of InvIT amounts to Rs 26,125 crore. The InvIT now boasts a diversified portfolio comprising fifteen operational toll roads, covering a combined length of approximately 1,525 km.

These roads are spread across nine states – Assam, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Telangana, Uttar Pradesh, and West Bengal, with concession periods ranging between 20 to 30 years.

National Highways Infra Trust

Established in 2021, the National Highways Infra Trust (NHIT) is an Infrastructure Investment Trust sponsored by the National Highways Authority of India (NHAI). Its primary objective is to bolster the Government of India’s National Monetization Pipeline.

Since November 2021, NHIT has raised approximately Rs 12,000 crore through the initial two rounds of monetisation. This capital was utilised for the acquisition of eight operational road assets spanning a total length of 636 km from NHAI.

Initially, NHIT units were priced at Rs 101 when issued in November 2021 and were subsequently listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).