NHIT Concludes India’s Largest Highway Monetisation Round

The National Highways Infra Trust (NHIT), the Infrastructure Investment Trust (InvIT) of the National Highways Authority of India (NHAI), has successfully completed the largest-ever monetisation transaction in India’s highway sector, raising an impressive ₹18,380 crore. This marks the fourth round of monetisation under the government’s National Monetisation Pipeline (NMP), bringing the total realised value across all rounds to over ₹46,000 crore.

NHIT raised ₹8,340 crore in unit capital from prominent domestic and international investors, along with ₹10,040 crore in debt from domestic lenders. The book-building process for unit capital saw strong investor demand, with units subscribed at a cut-off price of ₹133.50 per unit, reflecting a premium over the Net Asset Value (NAV) of ₹131.94 per unit as of December 31, 2024.

This round witnessed diverse investor participation, including

1. Domestic pension and provident funds: EPFO, L&T PF, Rajasthan Rajya Vidyut Karamchari PF, Indian Oil Corporation PF
2. Insurance companies: Axis Max Life Insurance
3. Banks & financial institutions: NaBFID, Axis Bank, IndusInd Bank
4. Mutual funds & investment firms: Nippon India, Baroda BNP Paribas, Nuvama, White Oak Capital
5. Foreign institutional investors: Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board (participating at their maximum limit)

A landmark feature of this round was the ₹2,035 crore investment by the Employees’ Provident Fund Organisation (EPFO), the first-ever investment by EPFO in an InvIT. Additionally, NHAI subscribed to 15% of the units at the same price.

The funds raised in this round will be used to acquire seven key national highway stretches across multiple states, totaling ₹17,738 crore in concession value (including a ₹97 crore premium). These include:

1. Andhra Pradesh: Anakapalle – Narsannapeta, Gundugolanu-Kovvuru, and Chittoor- Mallavaram.
2. Uttar Pradesh & Uttarakhand: Bareilly-Sitapur and Muzaffarnagar-Haridwar.
3. Gujarat: Gandhidham-Mundra.
4. Chhattisgarh- Raipur-Bilsapur.

These highway assets will be housed in a Special Purpose Vehicle (SPV) under NHIT. In return for upfront payments, NHIT will receive the rights to collect toll revenue on these stretches for 20-30 years, while also being responsible for their operation and maintenance.

With the completion of this fourth monetisation round, NHIT now manages a diversified portfolio of 26 operational toll roads (41 toll plazas) covering 2,345 km across 12 states. The concession periods range from 20 to 30 years, ensuring long-term revenue generation.

For the current fiscal year (FY 2024-25), NHAI aims to raise approximately ₹39,000 crore through monetisation, with

1. ₹6,661 crore already raised through Toll Operate Transfer (ToT)
2. ₹2,775 crore through project-based financing
3. ₹18,000 crore expected from two additional ToT rounds in the final stages

The success of NHIT underscores the growing investor confidence in India’s road infrastructure sector and strengthens the public-private partnership model in highway development. The participation of pension funds, provident funds, and global investors signals a sustainable future for infrastructure financing in India. With its largest-ever monetisation transaction, NHIT continues to play a crucial role in financing national highway expansion, paving the way for enhanced connectivity, economic growth, and long-term infrastructure investments.