In a landmark move to democratize infrastructure funding, India is set to launch its first public infrastructure investment trust for national highways. The National Highways Authority of India (NHAI) will introduce the Raajmarg Infra Investment Trust (RIIT), marking a significant expansion of public participation in highway financing.
New Era of Public Highway Investment
The proposed public InvIT, announced by the ministry of road transport and highways (MoRTH), represents a strategic shift in how India funds its critical infrastructure projects. This initiative aims to bring retail investors, pension funds, and domestic institutional investors directly into the financing of national highways, creating new avenues for public involvement in nation-building.
V. Umashankar, secretary of MoRTH, confirmed that the trust is likely to be operational by early next year and may raise close to ₹7,000-8,000 crore from its public issue before the end of the current fiscal year in March. The first issuance of InvIT units for retail and public investors is expected to launch in February.
Collaborative Banking Partnership
NHAI has incorporated Raajmarg Infra Investment Managers Pvt Ltd (RIIMPL) as the investment manager for this ambitious project. The entity was formally launched in Mumbai by NHAI chairman Santosh Kumar Yadav.
RIIMPL represents a collaborative venture with equity participation from India's leading banks and financial institutions, including:
- State Bank of India
- Punjab National Bank
- NaBFID
- Axis Bank
- Bajaj Finserv Ventures Ltd.
- HDFC Bank
- ICICI Bank
- IDBI Bank
- IndusInd Bank
- Yes Bank
NHAI will hold 15% equity in the new InvIT as its sponsor, while balance equity up to a 50% level may be subscribed by the participating banks. Rajendra Kumar, member (finance) at NHAI, has been appointed as the managing director and chief executive officer (additional charge) of the investment manager company.
Transforming Infrastructure Financing
This marks NHAI's second InvIT after the National Highway Infra Trust was established in 2020 as a private InvIT. The authority has demonstrated strong performance in asset monetization, having successfully monetized assets worth ₹48,995 crore through the toll-operate-transfer (TOT) model and raised approximately ₹43,638 crore across four rounds of private InvITs.
NHAI chairman Santosh Kumar Yadav emphasized the transformative potential of this initiative, stating: "Over the next three-five years, around 1,500 km of completed and operational National Highways will be introduced into the public InvIT, opening substantial investment avenues for the public. I am sure that this initiative will mark a new chapter of public participation in building the National Highway infrastructure in the country."
The partnership aims to unlock the monetization potential of National Highway assets while creating high-quality, long-term investment products primarily targeting domestic retail investors. RIIMPL will focus on establishing robust governance standards fully aligned with SEBI's InvIT regulations, ensuring transparency and investor protection.
Jagannarayan Padmanabhan, senior director & global head of consulting at Crisil Intelligence, highlighted the broader significance: "Financialization of infrastructure assets can play a transformative role in meeting the sector's large and long-term funding requirements. It also opens the door for retail investors to participate in India's infrastructure build-out, allowing them to benefit from the stable, annuity-like returns these assets typically generate over time."
The projects to be assigned to the proposed InvIT are currently being finalized, after which the fund raising exercise will commence. This initiative represents a significant step toward creating inclusive investment opportunities while accelerating India's highway development program.
