National Highways Infra Trust (NHIT)
Context:
Recently, National Highways Infra Trust (NHIT) has concluded fund-raising through ’InvIT Round-3’ for National Highway stretches of an aggregate length of 889 km at an Enterprise Value of over Rs. 16,000 crore.
Relevance:
GS-3 (Economy)
Key Highlights:
- NHAI’s recent monetization effort stands as its most extensive yet and represents a significant milestone in India’s road sector history.
- In its third round of monetization, NHAI successfully secured approximately Rs. 7,272 crores in unit capital from renowned domestic and international investors, alongside obtaining debt totaling around Rs. 9,000 crores from Indian lenders. These funds are earmarked for acquiring stretches of National Highways, with a base concession fee estimated at roughly Rs. 15,625 crore, supplemented by additional concessional fees amounting to Rs. 75 crore.
- The latest monetization initiative by NHAI marks a substantial achievement, reflecting robust investor confidence and substantial financial backing, crucial for advancing infrastructure development across the country’s road network.
About NHIT :
- The National Highways Infra Trust (NHIT) is the Infrastructure Investment Trust sponsored by the National Highways Authority of India (NHAI).
- It was set up in 2021 to support the Government of India’s National Monetization Pipeline.
- It is established under the Indian Trusts Act, 1882 and SEBI (Security and Exchange Board of India) regulations.
InvITs:
- Infrastructure investment trusts are institutions which pool investments from various investors and invest them into revenue-generating infrastructure projects thereby creating returns for the investor.
- They are much similar to mutual funds.
- Structured like mutual funds, they have a trustee, sponsor(s), investment manager and project manager.
- Trustee (certified by Sebi) responsibility is to inspect the performance of an InvIT.
- Sponsor(s) are the promoters of the company that set up the InvIT.
