NHAI eyes two InvIT rounds, auction of road bundles to private trusts for the first time
The National Highways Authority of India (NHAI) aims to raise ₹ 20,000 crore via two offerings from its own infrastructure investment trust (InvIT) this fiscal, two people aware of the plans said. It also plans to offer completed highway stretches to private InvITs for the first time, as part of an effort to raise up to ₹ 60,000 crore during the year, they said.
NHAI bundles stretches of operational highways into InvITs and offers its units to investors, who get a regular share of road tolls. Ever since the highway InvIT programme was launched in 2020, the authority has had a single offering every year through its own InvIT–National Highways Infra Trust (NHIT). So far, it has raised ₹ 43,638 crore through InvITs.
'Under its asset monetization strategy document, NHAI has identified 24 highway stretches covering a distance of 1,472 km for monetizationin FY26.More road project bundles could be added during the year to see that the exercise results in ₹ 50,000-60,000 crore resource mobilization for the government in FY26,' one of the two people cited above said on the condition of anonymity. 'This would be twice the ₹ 30,000 crore target given in the outcome budget for FY26.'
NHAI believes the market for these trusts has matured, prompting it to consider two offerings this year, the person cited above said. Its last InvIT in FY25 raised ₹ 17,738 crore. NHIT currently has over 350 investors and close to 20 operational highway projects.
To be sure, NHAI raised ₹ 28,724 crore in FY25 through InvITs and toll-operate-transfer (TOT) contracts, against a stiff targetof ₹ 40,000 crore.
However, the overall highway sector could reach closer to its targeted monetisation of ₹ 1.6 trillion under National Monetisation Pipeline-1 between FY22 and FY25, closing the fiscal with about ₹ 1.58 trillion.
"The two rounds of InvITs will help the trust to get over a third of monetization funds of about ₹ 60,000 crore expected to be targeted for FY26,' the second person said on the condition of anonymity. 'The road assets identified by NHAI for monetization itself is valued at over ₹ 40,000 crore, and if more bundles are identified, the ₹ 60,000 crore aspirational target could be easily achieved.'
Besides, NHAI also plans to auction completed road and highway bundles directly to private sector InvITs, the second person said.
This will be the first time that completed and revenue-generating highways under the 'toll operate transfer (ToT)' mechanism will be directly and exclusively offered to private InvITs, who could then mobilize global investments by offering subscription of InvIT units.
So far, the government has been offering road projects by nomination only to NHIT, whileauctioning ToT projects to private highway developers who could then transfer the road bundles to their respective InvITs.
An NHIT official said on the condition of anonymity that an exclusive InvIT round may be a possibility if it attracts dedicated trusts formed for infra investments. The official said several small road bundles with the NHAI could be offered only to InvITs to attract diverse investors from across the globe to invest in Indian infrastructure.
Queries emailed to NHAI and the ministry of road transport and highways remained unanswered till press time.
'This is an interesting variation to the ToT (toll-operate-transfer) model and has pros and cons. As a pro, InvITs are considered to have low cost of capital for investors and, hence, should offer best prices. Further, the assurance of reduced competition may spur InvITs to participate more vigorously in ToT bids,' said Kuljit Singh, partner and national infrastructure leader, EY India.
'As a con, InvITs that can acquire a large number of ToT projects may be limited as they typically do not have any significant dry powder available for acquisitions. Typically, InvITs raise just as much funds as are necessary to deploy immediately. Hence, this variation may lead to a reduction in competition and impact revenue realisation,' said Singh.
The NHAI monetizes assets through three key modes: toll-operate-transfer, InvITs, and securitization (project-based financing through special purpose vehicles). These instruments have helped the agency raise over ₹ 1.4 lakh crore across more than 6,100 km of national highways under the National Monetisation Pipeline 1. With a pool of ₹ 3.5-4 trillion of completed highway assets. The agency is set to contribute significantly to the government's asset monetization target to raise ₹ 10 trillion in the five years through 2030.
Apart from InvITs, ToT is expected to remain the mainstay of monetisation in FY26. Though only one bundle of ToT worth ₹ 6,661 crore was monetised in FY25, NHAI, with a mix of small and large road bundles, is expected to get a better response in FY26.
Already, under its monetisation strategy, NHAI has said it will offer three ToT bundles per quarter, including one smaller ( ₹ 2,000 crore), one medium ( ₹ 5,000 crore), and one large ( ₹ 9,000 crore) bundle. Earlier, only two bundles per quarter were targeted. Also, separate and additional InvIT phases would be launched during the year, while it would also mobilise funds by securitising future revenues from its ongoing and upcoming greenfield access-controlled highways and expressways.
NHAI set up its InvIT in 2014 and owns a 16% stake. Other investors inNHIT includeCanada Pension Plan Investment Board (CPPIB) and Ontario Teachers' Pension Plan (OTPP). AnInvIT is a pooled investment vehicle that allows investors to get exposure to income-yielding assets such as toll roads and power plants.
To safeguard investors' interest, the Securities and Exchange Board of India mandated InvITs to invest at least 80% of their total assets in completed infrastructure projects that are capable of generating income. The remaining 20% can be invested in under-construction projects. The trust also needs to distribute at least 90% of its income to the unit-holders as dividends.
There are about two dozen InvITs in the country. Some of these are Cube Highways Trust, India Infrastructure Trust, IRB Infrastructure Trust and IndInfravit Trust. Most of these either directly participate in auctions of ToT projects that are open to all, including developers, InvITs and fund houses, or get projects that are transferred by their parent highway development companies. There is no separate window for InvITs to acquire completed road projects.
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