The National Highways Authority of India (NHAI) is in discussions with investors to raise approximately Rs 9,000 crore (about $1.03 billion) for its National Highways Infra Trust (NHIT). This marks the largest fundraising effort for the state-backed trust to date.
If successful, this will also be the largest fundraise by a road-focused infrastructure investment trust (InvIT) in India.
Funds to Acquire Road Assets
The funds raised will be used to acquire a portfolio of road assets from NHAI. This move will significantly increase the assets managed by NHIT. According to a senior NHAI official, NHIT plans to acquire six highways, covering a total length of 500 kilometers, in the states of Andhra Pradesh, Chhattisgarh, Uttar Pradesh, Rajasthan, Uttarakhand, and Gujarat.
Investor Participation
Large institutional shareholders, including Canada’s CPP Investments and Ontario Teachers’ Pension Plan (OTPP), which together hold a 50% stake in NHIT, are expected to participate in this fundraising round, similar to previous rounds. Additionally, domestic institutional investors such as insurance companies, mutual funds, corporate treasuries, and family offices are also anticipated to contribute.
Currently, NHAI holds a 15.48% stake in NHIT, while CPP Investments and OTPP each own 25%.
Delays and Timeline
The fundraising, initially planned for 2024, was delayed due to uncertainty surrounding interest from foreign investors, particularly amid geopolitical tensions. Another NHAI official explained that the instability in domestic and global markets, influenced by elections in India and the U.S., also led to delays. NHIT now aims to complete the fundraising before March 31, 2025.
Previous Fundraising and Current Portfolio
In its previous fundraising round in March 2024, NHIT raised Rs 7,272 crore and acquired assets worth Rs 16,300 crore from NHAI.
NHIT’s current portfolio includes 15 road stretches, totaling 1,525 kilometers across nine states, including Uttar Pradesh, West Bengal, Assam, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Karnataka, and Telangana. These roads have a concession period ranging from 20 to 30 years.
The enterprise valuation of NHIT’s assets is currently Rs 29,041 crore, as per the InvIT’s Q2 FY25 presentation.
Highway Monetisation Program
Under the National Monetisation Pipeline (NMP), the road sector is expected to contribute Rs 1.6 lakh crore. By FY24, NHAI and the Ministry of Road Transport and Highways had raised Rs 53,541 crore through toll-operate-transfer and InvIT. Since the highway monetisation program started in 2018-19, NHAI has raised a total of Rs 1.08 lakh crore through asset recycling.
