25% of NHIT NCD issue is being reserved for retail investors: Gadkari

The issue opens on Monday, 17 October, 2022 and closes on Monday, 7 November, 2022 with an option of early closure.

Speaking at the launch of this issue, Minister of Road Transport and Highways, Nitin Gadkari said the minimum investment amount has been kept low at Rs.10,000, so that common man can participate in it. With that in mind, 25% of the NCD issue is being reserved for retail investors.

The coupon is 7.9% payable half yearly, which works out to 8.05% interest for the year. While the NCDs are not guaranteed by the government or NHAI, it carries AAA rating from two rating agencies, he also stated. 

“In the current environment, this presents an attractive opportunity to make investments from long term perspective”, said the Minister.

“The advantages of an InvIT instrument are that it has stable and predictable cash flows and experienced professionals manage the InvIT and operate and maintain the roads”, he added.

Gadkari said, “NHAI InvIT NCDs present an opportunity for all of you to participate in the National Monetisation Pipeline and building of Atmanirbhar Bharat”. 

India’s growth is only possible when it will be led by its own people and the common man, collectively, has the power to shape a future that we all dream of, he urged.

The Union Road Transport and Highways Minister further informed that government under the National Monetisation Pipeline, plans to monetize assets worth ₹6 lakh crore, so that the funds raised can be utilised to build new infrastructure. Here again, NHAI has the largest share under the National Monetization Pipeline at 27%. NHAI launched its InvIT last year not only to facilitate monetisation of roads and also to attract foreign and domestic institutional investors to invest in the roads sector.

 So far, NHAI InvIT has raised more than Rs.8000 crore from very high quality foreign and Indian institutional investors. Now they are looking to raise additional Rs.2850 crore, he said.

The proposed issue has a base issue size of Rs. 750 crores with an option to retain oversubscription up to Rs. 750 crores, aggregating up to Rs. 1,500 crores (“Issue”). The NCD issue offers coupon rate of 7.90% p.a. payable semi-annually and Effective Yield of 8.05%per annum for NCD holders in all categories. 

The NCDs are proposed to be listed on BSE and NSE (collectively, the “Stock Exchanges”) with BSE as the Designated Stock Exchange for the Issue. The NCDs have been rated ‘CARE AAA/Stable’ by CARE Ratings Limited and ‘IND AAA/Stable’ by India Ratings and Research Private Limited.

The minimum application size would be ₹ 10,000 (i.e. 10 NCDs) and thereafter in multiples of ₹ 1,000 (i.e. 1 NCD) thereof.