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Reuters
15-07-2025
- Business
- Reuters
India's SBI seeks senior creditor status for NHAI investment trust to stave off default concerns, sources say
MUMBAI, July 15 (Reuters) - State Bank of India ( opens new tab is seeking senior creditor status to gain early rights on repayments in case of default or liquidation of the state-owned road authority's investment trust (InvIT), two sources aware of the matter told Reuters. The lender, the country's largest, has written to the National Highway Authority of India (NHAI) seeking this status on its investments in National Highways Infra Trust (NHIT), the sources said on Monday. An InvIT is an investment vehicle that raises funds by issuing units. NHIT is the manager of NHAI's InvITs. The sources requested anonymity as the talks are private. SBI, NHAI and NHIT did not reply to a Reuters mail seeking comment. The move follows NHAI's plan to raise 200 billion rupees ($2.33 billion) by monetising its road assets through InvITs, according to Mint, a business daily. It has already raised 460 billion rupees through four rounds of InvITs since 2020, including a 183-billion-rupee round in March, opens new tab, India's biggest road monetisation exercise to date. SBI has significant exposure to India's road sector including projects backed by NHAI's InvITs. In 2018, it signed, opens new taban agreement with NHAI for a 10-year loan unsecured loan of nearly $3 billion. Under current rules, InvITs are not governed by India's bankruptcy laws, and typically, the unitholders of these trusts hold priority in the repayment hierarchy, one of the sources said. SBI has flagged the lack of creditor protection under these regulations for quite some time, the source added. "The lender is not at all happy with the arrangement and has been discussing the tweaks," the second source said. As part of the monetisation, NHAI transfers the ownership and operational responsibilities of completed highway stretches to the InvIT, which issues units to investors who are paid from the toll revenues. InvITs are regulated by the Securities and Exchange Board of India, the country's capital markets regulator. The total assets under management of five listed and 16 unlisted InvITs in India exceeded 7 trillion rupees as of March-end, according to data from Bharat InvITs Association. ($1 = 85.8430 Indian rupees)
Economic Times
15-07-2025
- Business
- Economic Times
SBI seeks senior creditor status for NHAI investment trust to stave off default concerns, sources say
Agencies SBI has significant exposure to India's road sector including projects backed by NHAI's InvITs. In 2018, it signed an agreement with NHAI for a 10-year loan unsecured loan of nearly $3 billion. State Bank of India is seeking senior creditor status to gain early rights on repayments in case of default or liquidation of the state-owned road authority's investment trust (InvIT), two sources aware of the matter told Reuters. The lender, the country's largest, has written to the National Highway Authority of India (NHAI) seeking this status on its investments in National Highways Infra Trust (NHIT), the sources said on Monday. An InvIT is an investment vehicle that raises funds by issuing units. NHIT is the manager of NHAI's InvITs. The sources requested anonymity as the talks are private. SBI, NHAI and NHIT did not reply to a Reuters mail seeking comment. The move follows NHAI's plan to raise 200 billion rupees ($2.33 billion) by monetising its road assets through InvITs, according to Mint, a business daily. It has already raised 460 billion rupees through four rounds of InvITs since 2020, including a 183-billion-rupee round in March, India's biggest road monetisation exercise to date. SBI has significant exposure to India's road sector including projects backed by NHAI's InvITs. In 2018, it signed an agreement with NHAI for a 10-year loan unsecured loan of nearly $3 billion. Under current rules, InvITs are not governed by India's bankruptcy laws, and typically, the unitholders of these trusts hold priority in the repayment hierarchy, one of the sources said. SBI has flagged the lack of creditor protection under these regulations for quite some time, the source added. "The lender is not at all happy with the arrangement and has been discussing the tweaks," the second source said. As part of the monetisation, NHAI transfers the ownership and operational responsibilities of completed highway stretches to the InvIT, which issues units to investors who are paid from the toll revenues. InvITs are regulated by the Securities and Exchange Board of India, the country's capital markets regulator. The total assets under management of five listed and 16 unlisted InvITs in India exceeded 7 trillion rupees as of March-end, according to data from Bharat InvITs Association.
Mint
03-07-2025
- Business
- Mint
Gadkari invites retail investors for a speed ride on InvIT highway
The National Highways Authority of India (NHAI) will set aside for retail investors ₹25,000 crore worth of units in its infrastructure investment trust (InvIT) issue this fiscal year, Union road transport and highways minister Nitin Gadkari said in an interview. The ambitious move to attract small investors to highways comes at a time the state-run road builder chases a target of building 10,000 km of highways and completing monetization of over ₹50,000 crore highway assets during the year. Also, in a first, NHAI will skip the practice of selecting the lowest bidder to prepare detailed project reports (DPR) for highways, as it tries to attract better quality consultants. Besides, the National Highways and Infrastructure Development Corp. Ltd (NHIDCL) will get a permanent cadre of personnel for building strategic road projects along India's borders. The aim of all new policies was to build infrastructure of international standards and bring down India's logistics costs that remain above the double-digit mark, Gadkari said. 'I am confident that with the work we have done to improve mobility in the country, the country's logistics costs would fall to single-digit mark, around 9% by December this year," he said. Mega-InvIT plan Gadkari said NHAI's public InvIT issue this year will keep 30-40% for retail investors, amounting to ₹25,000 crore. NHAI's InvITs own completed, toll-generating road projects, and investors purchasing their units get regular income from toll collections. NHAI's first InVIT - the National Highways Infrastructure Trust (NHIT) - provided retail investors just one option of non-convertible debentures (NCDs). The NCD issue launched in October 2022 to raise ₹1,500 crore had 25% reservation for retail investors, and it came with a coupon of 7.9% payable half yearly, which worked out to 8.05% assured interest per annum to the investors. Gadkari said a decision on how to raise retail investors' participation in NHAI's InVIT would be taken in the next two to three months. Trust route NHAI launched NHIT, its first InvIT in October, 2021. So far, it has raised ₹43,638 crore in four rounds to acquire 2,345 km of highways assigned to it by NHAI. The four rounds were undertaken in four years starting from FY22 till FY25. Separately, the road ministry approved a new policy on DPRs on Wednesday, Gadkari said, keeping his goal of ensuing quality road infrastructure in mind. A DPR is a comprehensive blueprint for a road construction project, outlining all technical, financial, and logistical details necessary for its execution. Currently, the consultant offering the lowest price, or so-called L1 bidder, is awarded the task of preparing DPRs. Under the latest plan, DPR consultants will be selected based on their technical qualifications and experience. The development assumes significance since it is a departure from the established practice of L1 tendering, with the lower quality DPRs often blamed for poor quality of highways and rising road accidents. Qualitative transformation "The aim is to undertake qualitative transformation of the sector at par international standards. So, the new policy would finalize the lowest rate, but award DPRs only to agencies with experience in the sector, having requisite trained people, and having manpower capable to handle large infrastructure projects," Gadkari said. Meanwhile, the National Highways & Infrastructure Development Corp. Ltd (NHIDCL) which builds strategic roads will create its own cadre, said Gadkari, a move that could support infrastructure creation along the borders. This will begin with 1,000 personnel belonging to the states where the roads are built. Currently, NHIDCL personnel comprise officials on from NHAI and other government departments. This comes against the backdrop of India's four-day conflict with Pakistan, and the Centre's renewed focus to develop the border road infrastructure. India is developing 1,560 km of border roads in Arunachal Pradesh, a high-speed corridor of about 200 km in Meghalaya, and tunnel-based road development projects in Jammu and Kashmir. Strategic roads On creating a new permanent cadre for strategic roads, the minister said the process is getting finalized with the Union Public Service Commission (UPSC). Recruitments for the cadre would be made from among people native to border states such as Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Meghalaya and the Union Territory of Jammu and Kashmir. 'Infrastructure is very important for the progress of any country. And our government, ever since 2014, has given the highest priority to infrastructure development in the country. Good infrastructure is precursor to the economy getting capital investments and industrial development. Investments will create jobs, boost exports and raise growth of the economy. It will also help the GDP to cross $5 trillion mark and become the third economy largest globally," Gadkari said.
Mint
30-06-2025
- Business
- Mint
NHAI's asset monetization strategy for roads is impressive but implementation is key
In just over a decade, India's national highway network has doubled to 146,000km, connecting almost every corner of the country. Since capital expenditure by the government on infrastructure such as roads has an income multiplier effect of up to four times, the construction of national highways has multifold social and economic benefits for the country. Given the increasing need for funds to sustain project growth, the National Highways Authority of India (NHAI) has adopted several asset monetization strategies that leverage existing roads to generate funds. Asset monetization refers to the unlocking of value from existing infrastructure assets by transferring their operational rights to private entities for a specified duration. This strategy represents a paradigm shift from traditional financing models and creates a virtuous cycle of development, stabilization and monetization of public assets by attracting private investments. NHAI has raised about ₹1.4 trillion through three modes of asset monetization: Toll-operate-transfer (TOT), an infrastructure investment trust (InvIT) and securitization. For this, it has been able to tap the vast and growing pool of long-term capital available with foreign sovereign wealth funds, pension funds and insurance companies. It has also drawn back into the infrastructure sector domestic investors whose confidence had been shaken by the 2018 IL&FS meltdown. The monetization of operational roads started with the first TOT bundle in 2018, when developers were shying away from build-operate-transfer (BOT) model projects and banks had stopped financing roads. This was followed by the launch of its InvIT in 2021, National Highways Infra Trust (NHIT), to tap alternative pools of capital that did not have the know-how of investing in companies interested in TOT projects. Till date, NHAI has monetized 2,564km of roads through TOT and raised ₹48,995 crore. Through NHIT, it has monetized 2,345km of roads and realized funds of ₹43,638 crore while holding an additional non-monetized stake of about 10% in NHIT. Also, ₹46,847 crore has been raised through securitization of the Delhi-Mumbai Expressway project. The success of NHIT has been spectacular, as it has raised funds almost equivalent to the amount from TOT projects from a diverse set of investors in less time. Its credibility has been further strengthened by its ability to raise funds at scale, with the last round of ₹17,738 crore being the largest ever for India's roads sector. For the further growth of asset monetization, NHAI recently released a paper on India's 'Asset Monetisation Strategy for the Roads Sector.' This 25-page paper is concise, reflecting the clarity of its objectives and messaging. The paper sets out three key pillars: value maximization, transparency and market development. With respect to the maximization of value, NHAI has stated the criteria for identification of monetizable assets while putting in place robust processes for technical and financial evaluation, transparent disclosure of assumptions guiding future cash flows, and for the valuation of bundles. To ensure transparency, NHAI will work towards the standardization of processes and dissemination of technical documents as well as other relevant information for investors. For the development of this market, it will take steps to support the expansion of the investor base and enhance stakeholder engagement. NHAI's plans include a publicly-listed InvIT and the use of different bundle sizes to attract a diverse set of bidders. Another notable point in this paper is its acknowledgement of the private sector's ability to ensure higher standards of project management and the use of newer technologies in the operation and maintenance of roads. As road assets are leased to private players for defined concession periods, they are expected to give road users a superior experience on the whole. One point that can be expected to generate debate is the proposed launch of a public-listed InvIT even though the existing NHIT has already established an excellent track record and has been performing well. Beyond the broad objective of market development, the paper does not elaborate on the advantages that might accrue from the launch of another InvIT. Since NHIT is one of the most successful experiments in the Indian public-private partnership space, with private capital (domestic and foreign) having invested heavily in a government-sponsored InvIT, NHAI is expected to address this issue and take the concerns of all stakeholders on board. The execution of the strategy outlined by the NHAI paper will be critical, especially since the authority's DNA is that of a highway development organization. Management of the issues and concerns of financial investors related to the operation of roads in India requires an approach distinct from the management of contractors and other similar parties that NHAI is more used to. A dedicated asset monetization cell with adequate authority, separation of powers and the ability to build a distinct culture of its own will go a long way in ensuring the success of the country's asset monetization strategy. The author is an infrastructure professional.
Mint
26-06-2025
- Business
- Mint
NHIT could be listed in FY26 to deepen retail participation, unlock capital
New Delhi: The National Highways Infrastructure Trust (NHIT) is likely to be listed publicly on Indian stock exchanges in FY26, marking a key milestone in the Centre's asset monetization strategy, two people aware of the matter said. NHIT is a privately listed infrastructure investment trust (InvIT) set up by the government's National Highways Authority of India (NHAI), The listing would give investors access to a portfolio of over 2,300 km of operational toll roads spanning around 30 revenue-generating projects across 19 states, the people mentioned above added. More importantly, it will help NHAI unlock capital for fresh infrastructure investments while bringing in retail investors, an objective highlighted in the highway authority's monetization strategy released earlier this month. As things stand, NHIT is currently listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) but operates as a privately listed entity. Only institutional investors such as private equity firms, venture capital funds, and financial institutions are currently allowed to trade in its shares. Having already monetized highway assets through a private InvIT structure backed by marquee global investors like the Canada Pension Plan Investment Board and Ontario Teachers' Pension Plan Board, NHAI is now prioritizing NHIT's public listing over setting up a new public InvIT, said the first person mentioned above, who spoke on the condition of anonymity. 'The move aims to broaden the investor base, deepen the market for infrastructure trusts, and reduce concentration risk,' the person said. 'It will also allow the trust to involve retail investors for the first time in an InvIT equity issue, part of a broader goal to enable ordinary citizens to participate in India's infrastructure growth story," the person added. So far, NHIT's only offering for retail investors has been through a non-convertible debenture (NCD) issue in October 2022, where it raised ₹ 1,500 crore. A quarter of the issue was reserved for retail investors, offering a coupon of 7.9% (8.05% annualized) payable semi-annually. 'Participation of retail investors in InvIT units could also be done by floating a new trust at a later stage. NHIT already has a bank of revenue-generating highway projects under its fold, and more will be transferred to it by NHAI, which has identified 24 projects spanning 1,472 km for monetization in FY26,' the second person cited above said, also requesting anonymity. 'This track record provides more confidence to investors than a new entity still establishing its portfolio and returns,' the person added. The proposal to list NHIT is currently under discussion between NHAI and the ministry of road transport and highways (MoRTH), which is also evaluating a separate public InvIT. The quantum of fundraising through the NHIT listing will depend on how many new highway stretches it acquires from NHAI. InvITs function like mutual funds, pooling investor capital to invest in long-term, cash-generating infrastructure assets. They enable developers to monetize stable revenue streams while offering investors predictable yields, making them especially appealing in asset classes like toll roads. NHAI launched its InvIT in October 2021, and since then, NHIT has raised ₹ 43,638 crore across four fundraising rounds between FY22 and FY25 to acquire 2,345 km of highways. For FY26, MoRTH is targeting asset monetization worth over ₹ 60,000 crore, though the exact mode, including via the InvIT route, is yet to be finalized. In its latest asset monetization strategy document, NHAI emphasized that 'initiatives to expand the investor-base and enhance stakeholder engagement will be crucial for the long-term success' of the programme. 'By broadening the pool of potential investors and actively engaging with stakeholders, NHAI will attract diverse investment profiles, ranging from institutional investors to retail participants. This inclusive approach will not only diversify the sources of capital but also mitigate risks associated with market fluctuations and investor sentiment,' it said. The document added that 'NHAI is now considering launching a public InvIT to increase the overall investor base, develop a competitive environment in the InvIT market, and mitigate the risk of a limited investor base. Further, public InvITs will also cater to retail investors, thereby providing access to infrastructure assets.' Spokespersons of the National Highways Infra Investment Managers, the investment manager for NHIT, the NHAI, MoRTH, and the Ministry of Finance didn't respond to emailed queries.
