invites: the first NHAI InvIT arrives, 2 Canadian pension funds invest

NEW DELHI: The National Highways Authority of India (NHAI) First Infrastructure Investment Trust (InvIT) has successfully raised Rs 6,000 crore with the participation of two Canadian pension funds, LIC and national banks. The two Canadian pension funds – the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan Board – have invested around Rs 3,000 crore, sources said.
This is the second InvIT sponsored by a public sector organization. In April, the public electricity transmission utility PGCIL sponsored PGlnvlT to raise around Rs 3,800 crore. InvIT is a commercial trust (like REIT), registered with the market regulator, which owns, operates and manages operational infrastructure assets. These long-term income-generating infrastructures generate cash flows which are then distributed periodically to unitholders.
The NHAI InvIT will initially have a portfolio of five operational toll roads with a total length of 390 km and more roads will be added later. These roads cross Gujarat, Karnataka, Rajasthan and Telangana. The NHAI has granted new 30-year concessions for these roads.
“Given the long-term nature of the assets, InvIT shares have been placed with international and national institutional investors. The units were issued as part of the private placement under SEBI InvIT regulations at the upper valuation range of Rs 101 per unit, ”NHAI said.
The two Canadian pension funds, as key investors, will each hold 25% of the units. The pay units were placed with a pool of domestic institutional investors including pension funds, insurance companies, mutual funds, banks and financial institutions.
The company’s total value of the original five routes portfolio was set at Rs 8,011.5 crore. NHAI InvIT is funding this through a debt of Rs 2000 crore to the State Bank of India, Axis Bank and Bank of Maharashtra. The balance is funded by issuing units of Rs 6,011.2 crore to international and domestic institutional investors, and NHAI as a sponsor.