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NHAI InvIT to hit market by month-end, not open to retail investors

NHAI has decided to the reserve much-sought-after InvIT IPO, through which it aims to monetise some of its assets, for institutional investors.

The maiden Infrastructure Investment Trust (InvIT) promoted by the National Highways Authority of India (NHAI), through which it aims to mop up Rs 5,100 crore, is likely to hit the market by end-May or early next month, according to official sources.

The NHAI InvIT, the second one promoted by a public-sector entity to be lapped up by investors in a just over a month – PGlnvlT, sponsored by power transmission utility PGCIL was launched in late April and its shares first traded on the exchanges on Friday – will be out of bounds for retail investors.

NHAI has decided to the reserve much-sought-after InvIT IPO, through which it aims to monetise some of its assets, for institutional investors.

The sources said market regulator Sebi has approved the draft prospectus submitted by the National Highways Infra Investment Managers (NHIIM), the investment manager which will manage the InvIT.

NHIIM is now discussing the contours of the issue with the potential investors, both domestic and international. As per the rule, an entity cannot subscribe more than 25% of the offering. The minimum bid amount has been fixed at Rs 26 crore. As per the rule, the promoter NHAI will have to retain 15% stake for a lock-in period of three years.

The units are proposed to be listed on the NSE. Proceeds from the listing shall be utilised for infusion of debt or equity into the projects SPV, National Highways Infra Projects Pvt Ltd (NHIPPL), for the payment of initial estimated concession value to NHAI and for payment of improvement and repair costs of the five stretches measuring 389 km brought under the SPV. The SPV will collect tolls on these stretches for 30 years.
The trust will acquire 100% of the equity shares of the project SPV from the sponsor NHAI.

The draft placement memorandum NHIIM placed with the market regulator said that the Board of the investment managers has already received term sheets from certain lenders in relation to loans amounting to approximately Rs 6,463 crore, to be availed by the trust. The NHIM chairman and the managing director has been entrusted with the powers to negotiate and finalise the terms of financing for an amount up to Rs 2,000 crore.

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