Mumbai : The National Roads Authority of India (NHAI) is in advanced contact with investors, including the Investment Board of the Canadian Pension Plan (CPPIB) and the Ontario Municipal Employees Pension System (OMERS), to raise ₪$ 5,000-6,000 million through the first private investment trust in infrastructure (InvIT), said two development-conscious people.
This will be the first monetization of an asset by a state-owned enterprise in the InvIT track, making it a critical exercise for the upcoming central government monetization program, through which it aims to raise as much as possible ₪6 trillion.
InvITs are trusts that manage income-producing infrastructure assets, usually offering investors a fixed return and a liquid investment method in infrastructure projects.
“Talks are in the final stages. CPPIB will enter as the anchor investor. OMERS will also invest in the trust of infrastructure investments. There are also some local institutional investors looking to participate. They have been tied around. ₪5,000 million funds and they are considering an addition ₪1,000 cooler, “said one of the two men and asked for anonymity because he is not authorized to speak to reporters.
“They have already completed work on the final placement document, and this deal is expected to close by the end of the month or the beginning of next month,” he added.
CPPIB and OMERS declined to comment, while an email sent to NHAI was left unanswered.
In April, the NHAI submitted draft infrastructure investment trusts proposed in April, outlining plans to raise fresh capital to the tune of ₪5,100 crore, and secondary sale of units by NHAI.
The portfolio of investment investments in infrastructure includes five road assets spread across Gujarat, Rajasthan, Maharashtra, Karnataka, Andre Pradesh and Telangana, with revenues of more than ₪$ 460 million for fiscal year 2021.
The proceeds will be used to inject debt or capital into the underlying road projects, which will then be used to pay an initial estimated franchise value to NHAI, and to fund improvement and repair costs, according to the draft documents submitted by NHAI.
The infrastructure investment trust has the option to purchase more road projects worth about 1,500 miles of roads from NHAI over the next three years.
Last year, the NHAI hired Suresh Goyal, former head of Infrastructure and Equatorial Properties in India, one of the largest infrastructure investors in Asia, to be the CEO and Chief Investment Officer of Infrastructure Investment Trust.
Trust investment in NHAI infrastructure will be the second monetization of assets by a state-owned company. In May, PowerGrid Corp. recruited. of India Ltd ₪7,700 crore through the issuance of its transmission line order.
Road projects have been the most popular assets to earn through the infrastructure investment confidence track since taking off the product in 2017.
Infrastructure developers IRB, L&T Infrastructure Development Projects Ltd. and the Shrem Group have benefited from road projects through this track.
Last month, Mint reported that the Cube Highways platform is in talks with pension funds and sovereign wealth funds to raise up to $ 1 billion through InvIT, which will include the largest road asset portfolio in the country.
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