What is NHAI InvIT?

Union Minister of Transport and Highways announced recently that National Highways Infra Trust (NHAI InvIT) bonds will provide a return of 8.05 per cent each year.

Key facts

  • The National Highways Infra Trust (NHAI InvIT) is an infrastructure investment trust established by the National Highways Authority of India (NHAI).
  • Its purpose is to provide funding for the government’s National Monetisation Pipeline (NMP).
  • It was established under the Indian Trusts Act, 1882, and the SEBI (Security and Exchange Board of India) regulations.
  • The creation of the NHAI InvIT was approved in December 2019 by the Union Cabinet headed by Prime Minister Modi.
  • Currently, the National Highways Infra Trust is looking to raise an additional investment of Rs 3,800 crore. It was able to receive Rs.1,500 crore via the issuance of non-convertible debentures (NCDs) with a long-dated maturity of 24 years.
  • The InvIT bonds will be listed in the BSE and NSE to enable their trading in the stock market.

About InvITs

Infrastructure investment trusts (InvITs) are institutions that obtain investments from various categories of investors and invest them into complete and revenue-generating infrastructure projects to create profitable returns. Their purpose is to increase investments in infrastructure development in India. They are similar to mutual funds, having a trustee, sponsors, investment manager, and project manager. The trustee is involved in assessing the performance of an InvIT and the sponsor promotes the company that set up the InvIT. The investment manager is involved in the supervision of assets and investments of the InvIT and the project manager is in charge of executing the project.

About National Monetisation Pipeline (NMP)

The NMP was unveiled by the Central Government in 2021 to increase funding for brownfield projects by involving private sector entities and providing them with revenue rights not ownership in the projects. These brownfield assets are de-risked from execution risks to attract private investment. Developed by NITI Aayog, the pipeline aims to boost the potential of the completed infrastructure assets that are either languishing or not fully monetized or under-utilized.

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