NHIT could be listed in FY26 to deepen retail participation, unlock capital

New Delhi: The National Highways Infrastructure Trust (NHIT) is likely to be listed publicly on Indian stock exchanges in FY26, marking a key milestone in the Centre’s asset monetization strategy, two people aware of the matter said.

NHIT is a privately listed infrastructure investment trust (InvIT) set up by the government's National Highways Authority of India (NHAI),

The listing would give investors access to a portfolio of over 2,300 km of operational toll roads spanning around 30 revenue-generating projects across 19 states, the people mentioned above added.

More importantly, it will help NHAI unlock capital for fresh infrastructure investments while bringing in retail investors, an objective highlighted in the highway authority’s monetization strategy released earlier this month.

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As things stand, NHIT is currently listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) but operates as a privately listed entity. Only institutional investors such as private equity firms, venture capital funds, and financial institutions are currently allowed to trade in its shares.

Having already monetized highway assets through a private InvIT structure backed by marquee global investors like the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, NHAI is now prioritizing NHIT’s public listing over setting up a new public InvIT, said the first person mentioned above, who spoke on the condition of anonymity.

Broadening investor base

“The move aims to broaden the investor base, deepen the market for infrastructure trusts, and reduce concentration risk,” the person said.

“It will also allow the trust to involve retail investors for the first time in an InvIT equity issue, part of a broader goal to enable ordinary citizens to participate in India’s infrastructure growth story," the person added.

So far, NHIT’s only offering for retail investors has been through a non-convertible debenture (NCD) issue in October 2022, where it raised ₹1,500 crore.

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A quarter of the issue was reserved for retail investors, offering a coupon of 7.9% (8.05% annualized) payable semi-annually.

“Participation of retail investors in InvIT units could also be done by floating a new trust at a later stage. NHIT already has a bank of revenue-generating highway projects under its fold, and more will be transferred to it by NHAI, which has identified 24 projects spanning 1,472 km for monetization in FY26,” the second person cited above said, also requesting anonymity.

“This track record provides more confidence to investors than a new entity still establishing its portfolio and returns,” the person added.

Proposal under discussion

The proposal to list NHIT is currently under discussion between NHAI and the ministry of road transport and highways (MoRTH), which is also evaluating a separate public InvIT.

The quantum of fundraising through the NHIT listing will depend on how many new highway stretches it acquires from NHAI.

InvITs function like mutual funds, pooling investor capital to invest in long-term, cash-generating infrastructure assets.

They enable developers to monetize stable revenue streams while offering investors predictable yields, making them especially appealing in asset classes like toll roads.

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NHAI launched its InvIT in October 2021, and since then, NHIT has raised ₹43,638 crore across four fundraising rounds between FY22 and FY25 to acquire 2,345 km of highways.

For FY26, MoRTH is targeting asset monetization worth over ₹60,000 crore, though the exact mode, including via the InvIT route, is yet to be finalized.

In its latest asset monetization strategy document, NHAI emphasized that “initiatives to expand the investor-base and enhance stakeholder engagement will be crucial for the long-term success” of the programme.

Diversifying investment

“By broadening the pool of potential investors and actively engaging with stakeholders, NHAI will attract diverse investment profiles, ranging from institutional investors to retail participants. This inclusive approach will not only diversify the sources of capital but also mitigate risks associated with market fluctuations and investor sentiment,” it said.

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The document added that “NHAI is now considering launching a public InvIT to increase the overall investor base, develop a competitive environment in the InvIT market, and mitigate the risk of a limited investor base. Further, public InvITs will also cater to retail investors, thereby providing access to infrastructure assets.”

Spokespersons of the National Highways Infra Investment Managers, the investment manager for NHIT, the NHAI, MoRTH, and the Ministry of Finance didn't respond to emailed queries.