Nitin Gadkari wants retail investors to pip institutions in NHAI InvIT

Weeks after floating bonds for retail investors, Union road transport and highways minister Nitin Gadkari said on Friday that he seeks for retail investors to invest more in upcoming issuances of the National Highways Authority of India (NHAI) Infrastructure Investment Trust (InvIT).

The minister also wants them to gradually overtake institutional investors in the trust.

The ministry of road transport and highways (MoRTH) intends to give more road assets to InvITs this fiscal year, through another follow-on issuance.

The current issuance of non-convertible debentures (NCDs) worth Rs 1,500 crore was subscribed over eight times within eight hours of its issuance in October, according to the ministry. It had a 25 per cent reservation for retail investors.

The NCD has a coupon rate of 7.9 per cent with an effective yield of 8.05 per cent.

NHAI InvIT, or National Highways Infrastructure Trust (NHIT), has monetised assets worth Rs 11,791 crore through two issuances so far.

Newly-appointed MoRTH secretary and former NHAI chairperson Alka Upadhyaya said that an even bigger round of issuance is in the works. This, the ministry hopes to roll out by February.

Upadhyaya also said that the Centre may increase the share of retail investors, going forward.

The minister also assured investors that the Centre will continue to offer competitive returns to both institutional and retail investors.

There is a concerted effort from the highest echelons of the government to raise more finances for infrastructure projects through extra-budgetary methods. To that effect, the impressive returns on many toll-collecting highways present a great opportunity, he added.

“Finance secretary Somanathan proposed that many infrastructure projects have a very good internal rate of return. Also, there should be focus on new initiatives to offer these projects under the public-private partnership (PPP) mode along with the general Budget,” the minister said. The minister said the Centre will approach retail investors for more highway projects like the Delhi-Mumbai Expressway, which has a total project value of Rs 1 trillion.

InvITs are investment instruments where institutions and individuals can invest in equity of road assets. They need to buy InvIT units, with returns based on toll collections and revenues of these operational roads.