The National Highways Infra Trust (NHIT) plans to raise Rs 4,500 crore through term loans to acquire a portfolio of five operational road assets from its parent NHAI.
The estimated enterprise value of these assets is likely to be above Rs 9,000 crore.
Banking sources said this transaction was part of an asset monetisation of toll operate transfer (ToT) arrangement. The funding for the acquisition has two components — long-term debt and equity. While debt will be around Rs 4,500 crore, the balance will be through the equity raised by the issuance of infrastructure investment trust (InvIT) units.
While the trust has ratings for loans up to Rs 4,500 crore, it was not raising all amounts in one go. Initially, it would look at Rs 3,500 crore worth of loans, sources said.
Two infra lenders — National Bank for Financing Infrastructure and Development (NaBFID) and India Infrastructure Finance Company (IIFCL) — are extending loans to trust, the bankers said. The NHAI has formed NHIT to hold operational road assets in India.
Earlier, the NHIT had raised a debt of Rs 2,000 crore and a capital of Rs 6,011.6 crore to pay the concession fee of Rs 7,350 crore to the NHAI for the initial five assets in the first round in FY22. It later raised a debt of Rs 2,350 crore and a capital of Rs 1,430 crore to pay the concession fee of Rs 2,825 crore to NHAI for the next three assets (second round) in FY23. The current fundraise involving the term loans is part of the third round.
Rating agency India Ratings has assigned “AAA” to the proposed term loan. The InvIT structure provides diversification benefits. The pooled structure of the InvIT results in the availability of cash flows from the pool of 13 toll road assets, comprising the existing eight toll road assets and the proposed five assets, rating agency said.
The InvIT, through its 100 per cent subsidiary NHIT Eastern Projects, proposes to house the five road assets with an aggregate length of 2,660 lane km spread across four states. The NHIT road project acquisition deal is expected to be concluded in July 2023.
NHIT has an established track record of the transfer of surplus cash from special purpose vehicles to the InvIT and subsequent distributions to unitholders.