Private Placement of units by the NHAI InvIT

JSA advised National Highways Infra Trust (NHAI InvIT), an infrastructure investment trust (InvIT) registered with the Securities and Exchange Board of India, in relation to the recently concluded initial placement of units of the NHAI InvIT by way of a private placement.

The NHAI InvIT, the flag-bearer of the Government of India’s National Monetization Pipeline, undertook an initial offer of 499,600,000 Units by way of a fresh issue through a private placement at a price of  ₹ 101 per unit, aggregating to ₹ 5,045.96 crores. Further, as part of the transaction, the National Highways Authority of India was allotted approximately 95,600,000 units, including pursuant to the share purchase agreement entered into with the NHAI InvIT for transfer of the entire shareholding in the Project SPV that houses the road assets.

The NHAI InvIT, sponsored by the National Highways Infra Trust, will initially have a portfolio of five operating toll roads with an aggregate length of 390 kilometres, with more roads planned to be added later. These roads are located across the states of Gujarat, Karnataka, Rajasthan and Telangana. The concessions for the project highways have been granted by way of bespoke concession agreements that were prepared and finalised in consultation with the Ministry of Road Transport and Highways on the basis of the existing toll-operate-transfer concession, with requisite customisation basis the specific requirements and features of the transaction, as well as industry best practice and stakeholder inputs.

The National Highways Authority of India has granted new concessions of 30-years for each of these roads. In view of the long-term nature of the assets, the units of NHIT were placed with international and domestic institutional investors.

The NHAI InvIT attracted two international pension funds, namely Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, as anchor investors, who will hold 25% of the units each. The balance units were placed with a diversified set of domestic institutional investors comprising pension funds, insurance companies, mutual funds, banks and financial institutions.

The units of the NHAI InvIT were listed on the National Stock Exchange of India Limited and the BSE Limited on November 10, 2021.

This is the first ever private placement of units by a public sector InvIT in India and the first issue of units in India by a regulatory authority.

Incidentally, JSA also advised on the marquee POWERGRID InvIT IPO, which was the other asset monetization project (apart from the NHAI InvIT) identified by the Minister of Finance in her 2021-22 Budget Speech.

The Capital Markets work was done by Lead Partner – Arka Mookerjee, Partners – Pracheta Bhattacharya and Siddhartha Desai and Associates – Ananth Balaji and Sourav Modi.

The Concession Agreements and related advisory was handled by Lead Partner – Vishnu Sudarsan, Partners – Ashish Suman and Kartikeya G.S., Associate – Ayan Sinha and Junior Associate – Rishabh Jha.

NHAI InvIT has taken a secured term loan of an amount of INR 2000 crores from State Bank of India, Axis Bank Limited and Bank of Maharashtra. Further, NHAI InvIT utilised these loan proceeds and unitholders’ contribution to provide a secured loan to National Highways Infra Projects Pvt Ltd for financing the payment of the concession fees. These financing arrangements were handled by Lead Partner – Dina Wadia, Partner – Soumitra Majumdar and Associate – Kemi Gupta.