NHAI InvIT to replace urban with rural roads
ROADS & HIGHWAYS

NHAI InvIT to replace urban with rural roads

The Infrastructure Investment Trust (InvIT) by the National Highways Authority of India (NHAI), which is expected to enter the market by the end of this fiscal year, is likely to undergo changes to suit the prospective bidders better.

The Union government is awaiting approval from the market regulator Securities and Exchange Board of India (Sebi).

The road stretches in the urban areas, which were part of the earlier InvIT offering, have been removed in the proposal and replaced with the roads in rural areas. One reasoning behind this proposal is that it may attract toll and other revenues, while urban areas generate revenues on their own and therefore may not require funding via the InVit.

InvITs are like mutual funds that enable direct investment of small amounts of money from a possible individual or institutional investors in infrastructure to earn a small portion of the income as a return. In the model, assets are put in an InvIT where investors place money and income generated from such assets is paid as a dividend.

The InvIT mechanism is being brought in to generate funds from foreign and domestic institutional investors. Five operational roads have been identified to be transferred to InvIT. Placement memorandum is under progress, and the issue may take place in March 2021 to raise expected funds to the tune of Rs 5,000 crore, the road transport ministry said in an official statement.


Make in Steel 2021

24 February 

Click for event info


4th Indian Cement Review Conference 2021

17-18 March 

Click for event info


Overall, the NHAI has identified around 19 projects worth Rs 35,000 crore for fundraising under this route. NHAI has received a good response from investors such as Life Insurance Corporation (LIC), the Canadian pension fund, and National Infrastructure Investment Fund (NIIF) for its InvIT.

In December 2019, the Union Cabinet had allowed the NHAI to set up an InvIT. It approved of setting up the trust under the Indian Trust Act, 1 1882, and in compliance with the SEBI (Infrastructure Investment Trusts) Regulations, 2014.

It also gave the NHAI the flexibility of holding assets under the trust directly, or through a special purpose vehicle/holding company of the NHAI.

The money raised through such monetisation will be used for further investment in the road sector. A part of the toll revenue will be used for operation and maintenance.

NHAI has sponsored one InvIT that will attract domestic and international institutional investors. As many as five operational roads at an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI InvIT.

Image: NHAI has identified around 19 projects worth Rs 35,000 crore for fundraising


Also read: Govt-sponsored infra investment trust by March

The Infrastructure Investment Trust (InvIT) by the National Highways Authority of India (NHAI), which is expected to enter the market by the end of this fiscal year, is likely to undergo changes to suit the prospective bidders better. The Union government is awaiting approval from the market regulator Securities and Exchange Board of India (Sebi). The road stretches in the urban areas, which were part of the earlier InvIT offering, have been removed in the proposal and replaced with the roads in rural areas. One reasoning behind this proposal is that it may attract toll and other revenues, while urban areas generate revenues on their own and therefore may not require funding via the InVit. InvITs are like mutual funds that enable direct investment of small amounts of money from a possible individual or institutional investors in infrastructure to earn a small portion of the income as a return. In the model, assets are put in an InvIT where investors place money and income generated from such assets is paid as a dividend. The InvIT mechanism is being brought in to generate funds from foreign and domestic institutional investors. Five operational roads have been identified to be transferred to InvIT. Placement memorandum is under progress, and the issue may take place in March 2021 to raise expected funds to the tune of Rs 5,000 crore, the road transport ministry said in an official statement.Make in Steel 202124 February Click for event info4th Indian Cement Review Conference 202117-18 March Click for event info Overall, the NHAI has identified around 19 projects worth Rs 35,000 crore for fundraising under this route. NHAI has received a good response from investors such as Life Insurance Corporation (LIC), the Canadian pension fund, and National Infrastructure Investment Fund (NIIF) for its InvIT. In December 2019, the Union Cabinet had allowed the NHAI to set up an InvIT. It approved of setting up the trust under the Indian Trust Act, 1 1882, and in compliance with the SEBI (Infrastructure Investment Trusts) Regulations, 2014. It also gave the NHAI the flexibility of holding assets under the trust directly, or through a special purpose vehicle/holding company of the NHAI. The money raised through such monetisation will be used for further investment in the road sector. A part of the toll revenue will be used for operation and maintenance. NHAI has sponsored one InvIT that will attract domestic and international institutional investors. As many as five operational roads at an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI InvIT.Image: NHAI has identified around 19 projects worth Rs 35,000 crore for fundraising Also read: Govt-sponsored infra investment trust by March

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?