NHAI Eyes Public InvIT to Boost Infrastructure Funding

NHAI’s plan for public InvIT

NHAI Eyes Public InvIT to Boost Infrastructure Funding: The National Highways Authority of India (NHAI) is preparing to roll out a public Infrastructure Investment Trust (InvIT). This initiative is designed to tap into retail investor participation and increase funding for road projects under the asset monetisation pipeline. So far, NHAI has been running a private InvIT, called the National Highways Infra Trust (NHIT), which has already monetised more than 2,300 km of highways.

This success has pushed NHAI to expand its model by allowing the general public to invest directly in infrastructure. It’s not just about raising funds—it’s also about involving more Indians in long-term national growth.

Understanding InvITs in simple terms

InvITs are like mutual funds, but for infrastructure. Multiple investors come together to fund highway projects, and in return, they receive a share of the earnings—mainly from toll collections. NHIT, the current InvIT by NHAI, focuses mainly on institutional investors. The new public InvIT will be open to retail investors, making highway investment accessible to common citizens.

India introduced InvITs under SEBI regulations in 2014 to improve infrastructure financing. InvITs are a key tool in India’s plan to bridge the infrastructure funding gap.

Progress under the National Monetisation Pipeline

According to NHAI’s latest Asset Monetisation Strategy Report, it has already achieved 71% of its target for the National Monetisation Pipeline (NMP) in the road sector. That’s ₹1.15 trillion out of a ₹1.6 trillion target from 2021 to 2025. So far, across all sectors, the overall monetisation is ₹1.4 trillion.

This proves the importance of road infrastructure in India’s economic vision. Roads account for the highest share under the NMP—nearly 27% of total assets.

Looking ahead at future goals

In the second phase of the monetisation drive, expected to last until 2030, NHAI may be tasked with monetising ₹3.5 trillion worth of highways. This will ensure a steady flow of funds for expanding road networks, while reducing reliance on government budgets.

Barriers in the monetisation journey

The process hasn’t been smooth. Challenges include complex regulations, slow approval processes, and issues around transparency. One example is the Initial Estimated Concession Value (IECV), which was earlier hidden due to concerns of bid rigging. However, NHAI has now promised to publish this value again to build investor trust.

Making investments more flexible

To attract a wider set of investors, NHAI is redesigning its Toll Operate Transfer (ToT) model. It will now offer three different bundles every quarter, allowing flexibility in investment size. This way, both small and large investors can participate based on their appetite and capacity.

Reinvestment and fund use

Till now, NHAI has raised ₹43,638 crore through InvITs and ₹49,000 crore through ToT bundles. These funds are directly reinvested into building new highways. This model reduces pressure on the central budget and ensures a sustainable funding cycle.

Private involvement and technology boost

By opening the doors to private investors, NHAI expects improvements in technology, asset management, and construction quality. Private participation often brings in efficiency, reducing maintenance costs and extending the life of highways.

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NHAI Eyes Public InvIT to Boost Infrastructure Funding: