NHAI InvIT: Now invest as low as Rs 10,000 in road projects and earn return of over 8 per cent

InvITs are instruments on the pattern of mutual funds, designed to pool money from investors and invest in assets that will provide cash flows over a period of time.

Retail investors now have one more option to invest in the nation's development and that too by earning a decent return on their investment. The National Highways Infra Trust (NHAI InvIT), the infrastructure investment trust sponsored by the National Highway Authority of India (NHAI) to support the government's National Monetization Pipeline, has raised Rs 1,430 crore from domestic and international investors through the placement of its units, for part funding its acquisition of three additional road projects from NHAI. In addition to the above, NHAI InvIT has also filed a prospectus with SEBI for the issuance of Non-Convertible Debentures (NCDs) to raise Rs 1,500 crore. 

The minimum application size would be Rs 10,000 (i.e. 10 NCDs) and thereafter in multiples of Rs 1,000 (i.e. 1 NCD) thereof. Union Road Transport and Highways Minister Nitin Gadkari informed that the NHAI InvIT aims to garner Rs 1500 crore from domestic investors through Non-Convertible Debentures or NCDs, which have a long-dated maturity of 24 years. 

"The coupon is 7.9% payable half yearly, which works out to 8.05% interest for the year. While the NCDs are not guaranteed by the government or NHAI, it carries AAA rating from two rating agencies," said Gadkari. 

The Issue opens on Monday, October 17, 2022 and closes on Monday, November 7, 2022 with an option of early closure.

"The proposed issue has a base issue size of Rs 750 crores with an option to retain oversubscription up to Rs 750 crores, aggregating up to Rs 1,500 crores (“Issue”). The NCDs are proposed to be listed on BSE and NSE (collectively, the “Stock Exchanges”) with BSE as the Designated Stock Exchange for the Issue," said the Ministry of Road Transport & Highways in a statement.

The Union Road Transport and Highways Minister further said that Government under the National Monetisation Pipeline, plans to monetize assets worth Rs 6 lakh crore, so that the funds raised can be utilised to build new infrastructure. 

NHAI launched its InvIT last year not only to facilitate the monetisation of roads and also to attract foreign and domestic institutional investors to invest in the roads sector. So far, NHAI InvIT has raised more than Rs 8,000 crore and is now looking to raise additional Rs 2,850 crore.