India’s highway funding plan has received major support. The EPFO investment in the NHAI InvIT marks an important step. It shows strong trust in road projects backed by the government.
The Employees’ Provident Fund Organisation has committed Rs. 1,000 crore to the RIIT public issue. RIIT stands for Raajmarg Infra Investment Trust. The National Highways Authority of India promotes this trust.
EPFO will buy 16.6% of the total units offered in this issue. This share is higher than the sponsor’s share. NHAI has committed to buy 15% of the units.
The NHAI InvIT plans to raise Rs. 6,000 crore through equity. The total fund requirement is Rs. 9,500 crore. The remaining Rs. 3,500 crore will come through loans. The trust will use this money to buy five highway stretches. These roads cover 260 km across four states.
The assets include the 80.52 km Gorhar Barwa Adda stretch in Jharkhand. The 69.4 km Chilakaluripet Vijayawada road in Andhra Pradesh is also included. In Tamil Nadu, the trust will acquire the 32.6 km Chennai Bypass and the 33 km Chennai Tada section. Karnataka adds the 44.6 km Neelmangla Tumkur stretch.
The price band for the RIIT public issue is Rs. 99 to Rs. 100 per unit. Around 10% of the units may be reserved for retail investors. Anchor investors can place bids from March 10. The minimum bid size for anchor investors is Rs. 14,850 for 150 units.
SBI Life Insurance Company has also joined as a strategic investor. It will invest Rs. 260 crore and take a 4.3% stake.
Last financial year, EPFO invested Rs. 2,035 crore in another NHAI-backed trust called NHIT. NHAI has also accepted a Rs. 6,220 crore offer from NHIT to acquire two highway stretches. With these deals, total highway monetisation through InvITs will reach Rs. 15,720 crore.
In the current financial year, NHAI has already raised Rs. 12,357 crore through the Toll Operate Transfer method. Some more bundles are still open for bidding. Over the next three to five years, NHAI plans to add about 1,500 km of road assets to RIIT.
The NHAI InvIT model helps raise money from existing highways. It gives long-term investors a steady income option. The EPFO investment supports both retirement savings and highway development in the country.
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