Experienced sponsor coupled with importance to the GoI

The NHIT was set up by the NHAI in October 2020 as an infrastructure investment trust to monetise its road assets. The InvIT was authorised by the Union Cabinet and announced by the Finance Minister in Union Budget 2021. As a principal vehicle proposed for the monetisation of road assets in the country under the National Asset Monetisation Pipeline, InvIT holds significant importance for the GoI

NHAI is the nodal agency responsible for the development and maintenance of national highways. It was constituted u/s 3(1) of the National Highways Authority of India Act, 1988, and commenced operations in February 1995 to develop, maintain, and manage national highways in the country. The NHAI is vested with executive powers for developing national highways in India by MoRTH.

Geographically-diversified portfolio of eight toll road projects

Eight road project assets, namely, the Palanpur-Abu Road, Abu Road-Swaroopganj, Chittorgarh-Kota, Kothakota-Kurnool, and Belgaum-Kagal (above five assets under round-1), Agra Bypass, Borkhedi-Kelapur, and Shivpuri-Jhansi (three assets under round-2) have been transferred to InvIT. The portfolio projects are located at diversified geographical locations spread across different states 2013 Gujarat, Rajasthan, Telangana, Andhra Pradesh, Karnataka, Uttar Pradesh, Maharashtra, and Madhya Pradesh. This significantly mitigates the InvIT 2019s business risk by reducing the potential impact of any region-specific economic slowdown or force majeure events, or, with respect to specific risks of individual projects.

Concession agreement for 30 years (existing projects) and 20 years (additional projects), providing long-term revenue visibility$

The NHIT holds the entire shareholding in the project assets through its 100% subsidiary, ie, the NHIPPL,$which has entered into a 30-year CA with the NHAI for O&M of these assets on a TOT basis, which provides long-term revenue visibility. The required concession fees for all five road assets have been remitted, and accordingly, the NHAI has declared the appointed date for all the road assets as December 16, 2021; the toll collection has also commenced. For the additional three assets, the NHIPPL has also entered into a 20-year CA with the NHAI on a TOT basis on September 26, 2022, which provides long-term revenue visibility.

Comfortable debt coverage at the InvIT level along with the presence of DSRA

NHIT has sanctioned a debt of 92,000 crore for a period of 20 years towards round-1, of which it has raised u20b91,480 crore up to March 2022. Besides, the InvIT has raised a capital of 96,011 crore. The proceeds have been utilised for the payment of concession fee to the NHAI, as specified in the CA. Furthermore, with respect to the additional three assets transferred to the InvIT, the NHIT has plans to raise a debt of approximately 92,350 crore along with a unit capital of around 91,405 crore to be utilised for the payment of concession fees to the NHAI, as specified in the CA, undertaking initial improvement works, DSRA creation and transaction expenses.

The NHIT has received bids from investors aggregating to 91,294 crore towards the planned raise of unit capital. The NHIT has also availed a bridge loan of 91,500 crore for payment of concession fee to the NHAI, which will be repaid from the proposed non-convertible debenture (NCD) issuance. Apart from the above debt, the InvIT is also planning to raise debt in a phased manner up to 15 years of the concession period for meeting the MM expenses in the project highways as per its requirements.