NHAI InvIT

Syllabus: General Studies Paper 3

National Highways Infra Trust (NHAI InvIT), the infrastructure investment trust sponsored by National Highway Authority of India (NHAI) to support Government of India’s National Monetization Pipeline, has raised a sum of Rs 1,430 crore from domestic and international investors through placement of its units, for part funding its acquisition of three additional road projects from NHAI.

Infrastructure Investment Trusts (InvIT)

• InvITs are similar to mutual funds.
• While mutual funds provide an opportunity to invest in equity stocks, an InvIT allows one to invest in infrastructure projects such as road and power.
• InvITs are listed on exchanges just like stocks — through IPOs.
• The InvITs listed on the stock exchange are IRB InvIT Fund and India Grid Trust.
• InvITs are regulated by the Securities and Exchange Board of India (SEBI) (Infrastructure Investment Trusts) Regulations, 2014.
• Real Estate Investment Trusts (REITs) are similar to InvITs but they are present only in Real estate sector.
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NHAI InvIT 

• The infrastructure investment trust is sponsored by National Highway Authority of India (NHAI) to support Government of India’s National Monetization Pipeline.
• In order to enhance participation by domestic investors, NHAI InvIT is issuing Non-Convertible Debentures or NCDs to raise Rs.1500 crore, which have a long dated maturity of 24 years. 
• The minimum investment amount has been kept low at Rs.10,000, so that common man can participate in it. 
• 25% of the NCD issue is being reserved for retail investor. 
• The coupon is 7.9% payable half yearly, which works out to 8.05% interest for the year. 
• While the NCDs are not guaranteed by the government or NHAI, it carries AAA rating from two rating agencies.
• In the current environment, this presents an attractive opportunity to make investments from long term perspective