The Employee Provident Fund Organisation (EPFO) will join the public infrastructure investment trust promoted by the National Highways Authority of India (NHAI) by committing funds to acquire 16.6 per cent of the units on offer in the maiden public issue of Raajmarg Infra Investment Trust (RIIT). EPFO has committed Rs 10 billion (bn) to the offer and the NHAI as sponsor has committed to acquire 15 per cent of units. The arrangement places EPFO as a strategic investor with a stake larger than that of the sponsor.

State Bank of India Life Insurance Company Limited (SBI Life) will participate as another strategic investor by acquiring 4.3 per cent of units through an investment of Rs 2.6 bn. Managers of RIIT will invite bids from anchor investors from March 10 and such anchor bids are separate from the strategic investor commitments. Around 10 per cent of units may be set aside for retail investors and the issue aims to broaden participation across investor categories.

In all, RIIT will need to raise around Rs 95 bn to acquire five highway stretches totalling 260 km from NHAI, with about Rs 60 bn to be raised through equity and the remaining Rs 35 bn through debt. The price band for each unit has been fixed at Rs 99–100 and the minimum bid size for anchor investors is Rs 14,850 or 150 units. The managers will use the funds to complete acquisition and initial operations of the monetised assets.

The five stretches are spread across four states and total 260 km. Over the next three to five years, NHAI plans to provide a further 1,500 km of assets to RIIT which could expand the trust’s portfolio. NHAI has accepted an offer of Rs 62.2 bn from the National Highways Infrastructure Trust (NHIT) for two highway stretches, which takes funds raised through InvIT monetisation to Rs 157.2 bn.