MoRTH | NCDs Issue Opens on 17th Oct , 2022

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NCDs Issue Opens on October
NCDs Issue Opens on October

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. In addition to the above, NHAI InvIT has also filed prospectus with SEBI for issuance of Non-Convertible Debentures (NCDs) to raise Rs 1,500 crore. The NCDs would carry a coupon of 7.90% payable semi-annually and would be available for subscription by both retail and institutional investors.

The Issue opens on Monday, October 17, 2022 and closes on Monday, November 7, 2022 with an option of early closure.

The proposed issue has a base issue size of Rs. 750 crores with an option to retain oversubscription up to Rs. 750 crores, aggregating up to Rs. 1,500 crores (“Issue”). The NCD issue offers coupon rate of 7.90% p.a. payable semi-annually and Effective Yield of 8.05%per annum for NCD holders in all categories. The NCDs are proposed to be listed on BSE and NSE (collectively, the “Stock Exchanges”) with BSE as the Designated Stock Exchange for the Issue. The NCDs have been rated ‘CARE AAA/Stable’ by CARE Ratings Limited and ‘IND AAA/Stable’ by India Ratings and Research Private Limited.

The minimum application size would be ₹ 10,000 (i.e. 10 NCDs) and thereafter in multiples of ₹ 1,000 (i.e. 1 NCD) thereof.

Virtually addressing a press conference organized by NHAI InvIT in Mumbai today, Union Road Transport and Highways Minister Nitin Gadkari informed that, 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. With that in mind, 25% of the NCD issue is being reserved for retail investors”, he informed. 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, he also stated. “In the current environment, this presents an attractive opportunity to make investments from long term perspective”, said the Minister.  “The advantages of an InvIT instrument are that it has stable and predictable cash flows and experienced professionals manage the InvIT and operate and maintain the roads”, he added.

Shri Gadkari said, “NHAI InvIT NCDs present an opportunity for all of you to participate in the National Monetisation Pipeline and building of Atmanirbhar Bharat”. India’s growth is only possible when it will be led by its own people and the common man, collectively, has the power to shape a future that we all dream of, he urged.

The Union Road Transport and Highways Minister further informed that Government under the National Monetisation Pipeline, plans to monetize assets worth Rs 6 lakh crore, so that the funds raised can be utilised to build new infrastructure. Here again, NHAI has the largest share under the National Monetization Pipeline at 27%. NHAI launched its InvIT last year not only to facilitate monetisation of roads and also to attract foreign and domestic institutional investors to invest in the roads sector. So far, NHAI InvIT has raised more than Rs.8000 crore from very high quality foreign and Indian institutional investors. Now they are looking to raise additional Rs.2850 crore.

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Speaking about NHAI’s achievements, the Union Minister said, “Today, there is no part of the country that does not have fully paved. We have given special emphasis to connecting even the farthest and remotest parts of the country, such as North Eastern part of the country through national highways. We are also working hard to provide all-season connectivity to religious and tourist places. The network of Expressways under the Bharatmala Programme being constructed all over the country will boost connectivity to major economic nodes and reduce cost and time of travel.  Under PM Gati Shakti National Masterplan, we are also connecting the remaining economic nodes with NHs. It will bring logistics cost down from 13-14% to 5% of GDP. Over the next 10-15 years, India is expected to be one of the top three economic powers globally, supported by the huge investments done in infrastructure, especially in roads sector”.  The government’s PLI scheme is helping global companies to shift their manufacturing bases to India, he further said

“Today, we have the second largest road network in the world covering about 63.72 lakh km”, he further informed.

The Press Conference was also addressed by Shri Suresh Goyal, MD & CEO of National Highways Infra Trust and representatives of the lead managers for the Issue.

Click here for details on NHAI InvIT NCDs.

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