The National Highways Infra Trust (NHIT) has announced its intention to raise Rs 45 billion in debts. This move comes as part of NHIT’s plan to acquire two operational road projects from its parent organization, the National Highways Authority of India (NHAI). The acquisition of these assets is scheduled to be completed in the fourth quarter, ending on March 31, Q4FY24.
NHIT Expands Asset Acquisition through Infrastructure Investment Trust (InvIT)
NHIT, functioning as an infrastructure investment trust (InvIT), initially planned to acquire five operational road projects from NHAI as part of its third round of asset acquisitions. However, this number has now been increased to seven. The decision to expand its portfolio demonstrates NHIT’s strong confidence in the potential of these projects. To finance the acquisition of these assets, NHIT intends to secure long-term debt amounting to Rs 90 billion, previously estimated at Rs 45 billion. Furthermore, the trust plans to generate equity by issuing units of its infrastructure investment trust (InvIT). This dual approach of debt financing and equity issuance will ensure a robust financial foundation for NHIT’s expansion plans.
NHIT Attains AAA Ratings for Rupee Term Loans from India Ratings
India Ratings, a leading credit rating agency, has awarded NHIT with AAA ratings for its rupee term loans. This high rating is a testament to NHIT’s strong operational assets, long-term revenue visibility, and minimal operational risks. The agency also noted the support NHIT derives from its parent organization, NHAI, which has a wealth of experience in managing national highways. The projected enterprise value of the seven assets NHIT plans to acquire is expected to be approximately Rs 160 billion. This estimation is pending the valuation report, marking a significant increase from the initially estimated value of Rs 90 billion for five assets. These figures indicate the tremendous potential these road projects hold and the value they will add to NHIT’s already impressive portfolio.
The Progress of NHIT’s Infrastructure Investment Trust (InvIT)
As of now, NHIT operates through its wholly-owned subsidiary, National Highways Infra Projects (NHIPPL), which oversees eight road assets with a combined length of 2,544 lane kilometers. This signifies the trust’s already vast presence and expertise in the infrastructure investment sector. By expanding its portfolio through the acquisition of these additional assets, NHIT aims to further solidify its position as a key player in the industry.
Conclusion
The National Highways Infra Trust’s decision to further expand its portfolio through the acquisition of two additional operational road projects demonstrates its commitment to enhancing India’s infrastructure and transportation networks. With the support of an experienced parent organization like NHAI and the backing of India Ratings, NHIT is poised for success in its pursuit of strategic asset acquisitions. As NHIT continues to reinforce its infrastructure investment trust (InvIT), it is well-equipped to contribute to India’s growth story and drive economic development.
