The Union Cabinet, chaired by the Prime Minister, has given its approval to the proposal of the Ministry of Road Transport and Highways authorising National Highways Authority of India (NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT guidelines issued by SEBI. This will enable NHAI to monetise completed National Highways that have a toll collection track record of at least one year and NHAI reserves the right to levy toll on the identified highway.
Impact
InvIT as an instrument provides greater flexibility to investors and is expected to create the following opportunities:
* Generation of specialised O&M concessionaires.
* Attract patient capital (for say 20-30 years) to the Indian highway market, as these investors are averse to construction risk and re interested in investment in assets which provide long-term stable returns.
* Retail domestic savings and corpus of special institutions (such as mutual funds, PFRDA, etc.) to be invested in infrastructure sector through InvIT.
