The Employee Provident Fund Organisation (EPFO) will join the public infrastructure investment trust (InvIT) promoted by the National Highways Authority of India (NHAI) as a strategic investor, committing funds to acquire 16.6 per cent of units in the public issue of Raajmarg Infra Investment Trust. The EPFO has committed Rs 10 bn and this would give it a larger holding than the sponsor, which has committed to acquire 15 per cent of units.

Raajmarg Infra Investment Trust is targeting a public offer to raise Rs 60 bn of equity as part of an overall mobilisation of about Rs 95 bn to acquire five highway stretches. SBI Life Insurance Company Limited is expected to take 4.3 per cent of units with an investment of Rs 2.6 bn and trust managers will invite bids from anchor investors from March 10.

The five stretches span four states and include an 80.52 km Gorhar–Barwa Adda section in Jharkhand, a 69.4 km Chilakaluripet–Vijayawada section in Andhra Pradesh, a 32.6 km Chennai Bypass and the 33 km Chennai–Tada section in Tamil Nadu, together with a 44.6 km Neelmangla–Tumkur section in Karnataka. Around Rs 60 bn of the Rs 95 bn acquisition cost will be met through equity and the remainder of Rs 35 bn through debt.

Over the next three to five years the NHAI plans to provide about 1,500 km of further assets to the trust and has already accepted an Rs 62.2 bn offer from the National Highways Infrastructure Trust for two highway stretches. Taken together, monetisations through InvIT structures will amount to Rs 157.2 bn and the NHAI has raised Rs 123.57 bn so far this financial year through the Toll Operate Transfer mode. The EPFO has viewed InvITs as an avenue for deploying retirement savings after its prior investment of Rs 20.35 bn in a private NHAI-promoted InvIT. Around 10 per cent of units could be set aside for retail investors, the unit price band is fixed at Rs 99–100 and the minimum anchor bid size is Rs 14,850 or 150 units.