National Highways Authority of India (NHAI) has submitted a proposal to the Securities and Exchange Board of India (Sebi) to set up the first infrastructure investment trust (InVIT) in the highway sector.
NHAI chairman Sukhbir Singh Sandhu said, "We have filed papers related to InVIT with the Sebi on March 31. We expect the Sebi approval to come in the next three weeks. We hope to launch the first tranche of the InVIT worth Rs 5,000 crore by the mid of May."
Apart from the InVIT, the government is also focusing on toll operate transfer (ToT) and securitisation for monetisation of the highway assets. The total InVIT, ToT and securitisation could be to the tune of Rs 18,000 crore in 2021-22, according to sources in the Ministry of Road Transport and Highways.
The union cabinet authorised NHAI to use InVITs as one of the preferred mode for raising long term finance for investment in the highways sector in 2019.
As per the regulations, InVITs are required to invest at least 80 percent of their corpus in operational assets and to ensure that 90 percent of the cash flows from operations are distributed to the investors. This essentially divests the InVITs from the construction risks in an infrastructure projects.
The Indian government has constructed highways at a record pace in 2020-21 despite Covid-led disruptions. Record length of 13,298 kms of highways has been constructed in FY21 and the government now plans to construct highways at a pace of more than 40 km per day in the current financial year.