Govt-sponsored infra investment trust by March
ROADS & HIGHWAYS

Govt-sponsored infra investment trust by March

The National Highways Authority of India (NHAI) said that India’s first government-sponsored Infrastructure Investment Trust (InvIT) could be operational by March 2021.

In-principle approval for transfer to the InvIT has been given for around six road assets worth Rs 5,000 crore, said NHAI.

Transfer of assets to the InvIT includes the 32.6 km Kotha-Kata Bypass to Kurnool (Telangana), the 75 km-long Palanpur-Abu Road in Gujarat, the 31 km-long Abu Road-Swaroopganj in Gujarat, the 77 km Maharashtra-Karnataka border to Belgaum, and the 160 km Chittorgarh Kota and Chittorgarh Bypass Road in Rajasthan.

In December 2019, NHAI received approval from the Union cabinet to float the InvIT and is now in the process of legal vetting of the financing instrument.

With an objective to mobilise additional resources through capital markets, NHAI has been actively working on setting up an InvIT to monetise its completed and operational national highways projects.

InvITs are popular among investors of long term revenue-generating assets like power-transmission projects and toll roads. They enable a large number of investors to pool their money for investments into operational infrastructure assets in return for regular dividends. Global investors have been keen on such entities floated by domestic entities since the operating infrastructure assets provide stable and long term yields under the InvIT structure.

The National Highways Authority of India (NHAI) said that India’s first government-sponsored Infrastructure Investment Trust (InvIT) could be operational by March 2021. In-principle approval for transfer to the InvIT has been given for around six road assets worth Rs 5,000 crore, said NHAI. Transfer of assets to the InvIT includes the 32.6 km Kotha-Kata Bypass to Kurnool (Telangana), the 75 km-long Palanpur-Abu Road in Gujarat, the 31 km-long Abu Road-Swaroopganj in Gujarat, the 77 km Maharashtra-Karnataka border to Belgaum, and the 160 km Chittorgarh Kota and Chittorgarh Bypass Road in Rajasthan. In December 2019, NHAI received approval from the Union cabinet to float the InvIT and is now in the process of legal vetting of the financing instrument. With an objective to mobilise additional resources through capital markets, NHAI has been actively working on setting up an InvIT to monetise its completed and operational national highways projects. InvITs are popular among investors of long term revenue-generating assets like power-transmission projects and toll roads. They enable a large number of investors to pool their money for investments into operational infrastructure assets in return for regular dividends. Global investors have been keen on such entities floated by domestic entities since the operating infrastructure assets provide stable and long term yields under the InvIT structure.

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