EPFO Update: EPFO enters NHAI's new InvIT, invests Rs 1,000 crore..
The Employees' Provident Fund Organization (EPFO) will now be an investor in the National Highways Authority of India's (NHAI) new infrastructure investment trust, the Highway Infra Investment Trust (RIIT). The EPFO will purchase 16.6% of the total units in the RIIT's first public issue.
According to representatives, the RIIT aims to raise ₹6,000 crore through this issue, with the EPFO having committed ₹1,000 crore. This will enable the EPFO to purchase more units than the sponsor, NHAI. NHAI has decided to acquire 15% of the units as a sponsor.
SBI Life to Also Become Investor
Another investor in the RIIT is SBI Life Insurance Company, which will invest ₹260 crore and pay 4.3%. The RIIT will also invite bids from anchor investors starting March 10. The RIIT will receive a total of approximately ₹9,500 crore to acquire five highway projects totaling 260 kilometers from the NHAI. This will include ₹6,000 crore from equity and ₹3,500 crore from debt.
New Option for Retirement Funds
EPFO is considering InvITs as a new and secure option for investing the retirement funds of organized sector employees. Last fiscal year, EPFO invested ₹2,035 crore in another InvIT of NHAI, the National Highway Infrastructure Trust (NHIT). Approximately 10% of the RIIT's units can be reserved for retail ventures. The price band per unit has been fixed at ₹99-₹100. The minimum bid for an anchor venture is 150 units, or ₹14,850.
Highways in four states will be included.
In the first phase, the RIIT will acquire five highway sections in Jharkhand, Andhra Pradesh, Tamil Nadu, and Karnataka. NHAI also plans to transfer approximately 1,500 km of additional road assets to the RIIT over the next three to five years. This fiscal year, NHAI is expected to disburse ₹12,357 crore through the Toll Operate Transformation (ToT) model. These routes will bring the total revenue generated through highway monetization to ₹15,720 crore.
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