NHAI to set up public sector’s first InvIT for asset monetisation

New Delhi: With an aim to facilitate investments in the highway sector, National Highways Authority of India (NHAI) is in the process of setting up an Infrastructure Investment Trust (InvIT). As part of the structure, a new company is being set up to act as the Investment Manager for the proposed InvIT, the Ministry of Road Transport & Highways said in an official statement on Thursday.

As NHAI's InvIT shall be the first InvIT to be sponsored by any government or semi-government entity in the country, it is important to have a professional management structure for the investment manager, the statement said.

In order to select the best talent from the market for the appointment of two Independent Directors and one Chairman for the Investment Manager Board, a search-cum-selection committee has been formed. NHAI's Chairman Dr Sukhbir Singh Sandhu is the convenor of the Committee and other members include Housing Development Finance Corporation (HDFC)'s Chairman Deepak Parekh, ICICI Bank's Chairman Girish Chandra Chaturvedi and former Secretary of the Ministry of Road Transport & Highways Sanjay Mitra.

The idea is to set up a competent entity of experts that can professionally run the infrastructure trust to mobilise resources from the market for monetising completed highway projects of NHAI.

What is an InvIT?

An Infrastructure Investment Trust (InvITs) is like a mutual fund, which enables direct investment of small amounts of money from the possible individual or institutional investors in infrastructure to earn a small portion of the income as return. InvITs work like mutual funds or real estate investment trusts (REITs) in features. InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.

National Highways Authority of India (NHAI)

The National Highways Authority of India (NHAI) is an autonomous agency of the government, set up in 1988 and is responsible for the management of a network of over 50,000 km of National Highways out of 1,15,000 km in India. It is a nodal agency of the Ministry of Road Transport and Highways.

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