Employees’ Provident Fund Organization (EPFO) will now join as investors in the Highway Infra Investment Trust (RIIT), the new infrastructure investment trust of the National Highway Authority of India (NHAI). EPFO will buy 16.6% of the total units in the first public issue of RIIT.
According to representatives, RIIT wants to raise Rs 6,000 crore through this issue, of which EPFO has prepared to invest Rs 1,000 crore. With this, EPFO will buy more units from sponsor NHAI. NHAI has decided to take 15% units as sponsor.
SBI Life will also become an investor
Another investor in RIIT is SBI Life Insurance Company, which will invest Rs 260 crore and give 4.3%. From March 10, RIIT will also invite bids from anchor investors. RIIT will get a total of about Rs 9,500 crore to purchase five highway projects of 260 km length from NHAI. Of this, Rs 6,000 crore will come through equity and Rs 3,500 crore through debt.
New option for retirement fund
EPFO is looking at InvIT as a new and safe option for investing the retirement funds of organized sector employees. Last financial year, EPFO had invested Rs 2,035 crore in another InvIT of NHAI, National Highway Infrastructure Trust (NHIT). About 10% of RIIT units may be reserved for retail ventures. The price band per unit has been fixed at Rs 99-100. The minimum bid for Anchor Venture has been kept at 150 units i.e. Rs 14,850.
Highways of four states will be included
In the first phase, RIIT will purchase five highway sections in Jharkhand, Andhra Pradesh, Tamil Nadu and Karnataka. NHAI also plans to hand over approximately 1,500 km of additional road assets to RIITs in the coming 3 to 5 years. In this financial year, Rs 12,357 crore has to be paid through NHAI Toll Operate Transformation (ToT) model. A total of Rs 15,720 crore will be provided through highway monetization through these routes.