National Highway Infra Trust

Right Mix of Operational Assets

- The toll collection at the existing five assets was Rs. 139.42 Crs for 16 December 2021 to 31 March 2022, recording average daily collection of Rs. 1.32 Crs.

- The toll collections increased to Rs.  229.78 Crs. in 5MFY23, resulting in 14.2% growth (over actual toll collections in FY22) in the average daily collection to Rs.

1.50 Crs, majorly attributable to a 10% increase in the toll rates YoY effective 1 April 2022 and improved traffic post COVID-19 impact.

Strong Sponsor

- The NHAI is a premier nodal agency responsible for the development of national highways in India; therefore, it is strategically important to the government of India (GoI).

- Its tax exemption status and privilege to raise funds through Section 54EC capital gains bonds and tax-free bonds reiterate its importance to the GoI.

- With the finance ministry’s focus on national monetisation pipeline, NHIT would play a key role in monetisation of road assets in the country

Concession agreement for 30 years (existing projects) and 20 years (additional projects) providing long-term revenue visibility

- A 30-year concession agreement with NHAI for Operations & Maintenance (O&M) of assets on a TOT basis provides long-term revenue visibility.

- NHAI has declared the appointed date for all the road assets as December 16, 2021; the toll collection has also commenced.

- For additional three assets, NHIPPL will enter into a 20-year concession agreement with NHAI on a TOT basis, which provides long-term revenue visibility.

Inherent O&M and MM risk along with interest rate risk

- The underlying assets are exposed to the inherent routine and periodic maintenance to be undertaken over the concession period.

- O&M (both routine and periodic maintenance) of the project highways under InvIT will be carried out based on a pre-agreed mechanism in which the project manager would be responsible for O&M, and the same will be captured under the appropriate InvIT agreements.

- The debt raised at InvIT level is at a floating rate of interest and is subject to a periodic reset, which exposes the Trust

on account of any adverse change in the interest rates in the future.

Inherent traffic growth risk 

- The toll revenues are a function of toll rates and traffic volumes.

- Traffic volumes are directly or indirectly dependent on multiple factors, including location of the road project, growth in the automobile sector, affordability of automobiles, the quality, convenience and travel efficiency of alternative routes outside the network of toll roads, etc.