SEBI Clears NHAI Road Investment Trust InvIT

SEBI Clears NHAI Road Investment Trust InvIT

Why in News? 

Recently, SEBI has approved NHAI’s Raajmarg Infra Investment Trust (RIIT), a public InvIT aimed at monetizing national highway assets. This initiative allows retail investors to participate in India’s infrastructure growth with a lower entry barrier.

NHAI’s Raajmarg Infra Investment Trust (RIIT)

• Raajmarg Infra Investment Trust is a new infrastructure investment vehicle created by the National Highways Authority of India (NHAI). 
• It is registered with the Securities and Exchange Board of India (SEBI) as a Public Infrastructure Investment Trust (InvIT). This approval was granted in December 2025.
• The trust is meant to be a long-term platform for investment in national highway assets owned by NHAI.
• It is designed to open the highway sector to retail and domestic investors who were earlier unable to directly invest in such large infrastructure assets. The trust will hold operational national highway projects that generate stable cash flows.
• The name “Raajmarg” reflects India’s national highway network. The trust is part of NHAI’s broader asset monetisation strategy to raise capital without relying only on government budget or borrowing. 
• It follows earlier models such as Toll-Operate-Transfer (TOT) and Private InvITs that monetised highway assets successfully. 
• Raajmarg Infra Investment Trust is supported by a strong group of banks and financial institutions. To manage the trust, NHAI set up a company called Raajmarg Infra Investment Managers Private Limited (RIIMPL). This company will serve as the Investment Manager for the trust. The trust will also have a Managing Director and CEO from NHAI. 
• RIIMPL includes equity participation from leading lenders in India: State Bank of India (SBI), Punjab National Bank (PNB), National Bank for Financing Infrastructure and Development (NaBFID), Axis Bank, Bajaj Finserv Ventures Ltd, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank and Yes Bank.
• In the coming 3 to 5 years, NHAI plans to bring about 1500 km of completed highways into the trust for investment by the public. This will expand the trust’s portfolio and diversify income sources. 

How Raajmarg Infra Investment Trust Will Work?

• First, NHAI will transfer completed and operational highway assets into the trust. These assets will be revenue-generating toll roads. Once the assets are transferred, the trust will issue units to investors. These units represent ownership in the assets held by the trust. 
• Investors will include both retail investors and institutional buyers. Retail investors can buy units in a public offering or through stock exchanges once the listing happens. The trust’s units should trade on Indian stock markets, making investment accessible to all.
• The trust will then collect toll fees and other revenues from the highways. These revenues will be used in two ways. First, the trust will pay out regular income distributions to unit holders. Second, the trust will use remaining funds for growth and investment in additional highway assets if needed.

Significance of RIIT

• RIIT expands investment access by allowing retail and domestic investors to own parts of national highway assets that were earlier only open to large institutions. This change marks a new way for ordinary investors to join infrastructure growth in India.
• RIIT strengthens highway monetisation by helping NHAI turn operational toll roads into financial assets that can raise capital for future projects. This supports long-term funding for highway expansion and reduces reliance on government budgets.
• RIIT supports economic growth by enabling long-term investment in road networks that reduce transport costs, improve connectivity, and boost commerce across states. Better highways help move goods faster and help industries grow.
• RIIT enhances transparency and governance through NHAI and SEBI’s public InvIT rules that require clear disclosure and investor protection standards. These regulations help build investor confidence in highway asset financing.

Concept of Infrastructure Investment Trusts (InvITs)

• • About: An Infrastructure Investment Trust (InvIT) is a financial arrangement that allows people and institutions to invest in infrastructure assets. These assets usually earn income over long periods. 
  • Aims: InvITs convert physical assets into tradable financial units that investors can buy and sell. This improves liquidity and brings private and public investment together for national infrastructure growth. They support national drives like the National Monetisation Pipeline.
  • Regulatory Framework: InvITs were formally introduced in India under the SEBI (Infrastructure Investment Trusts) Regulations, 2014. The regulations gave a clear legal basis for setting up and running InvITs in the Indian market. 
  • Structure: An InvIT has a tiered structure that includes four key participants:
    • Sponsor(s): The sponsor is usually the original owner or developer of the infrastructure asset. The sponsor sets up the InvIT and transfers eligible assets into the trust. Sponsors must have a minimum net worth (typically high, such as ₹100 crore or more) and must hold a part of the InvIT for a set period.
    • Trustee: A trustee holds the infrastructure assets on behalf of investors. The trustee must be registered with SEBI as a debenture trustee. The trustee ensures the trust complies with the law and that investors’ rights are protected.
    • Investment Manager: This party handles decisions about asset purchases, investments, capital allocation, and financial strategy for the InvIT.
    • Project Manager: This party oversees the operational aspects of the infrastructure assets, such as maintenance, performance, and delivery of services. 

• Regulatory Rules: SEBI’s framework has several rules to protect investors and ensure stability:

• • • Asset Investment Rule: At least 80% of an InvIT’s assets must be in completed and income-generating infrastructure projects. This ensures that the assets can generate cash flows.
    • Distribution Rule: InvITs must distribute at least 90% of net distributable cash flow to unit holders. This ensures that investors receive regular income, usually twice a year.
    • Valuation and Disclosure: Independent valuation of assets is required periodically. InvITs must also follow strict disclosure standards similar to listed companies to maintain transparency.

• Types: There are two broad categories of InvITs:

• • Publicly Listed InvITs: These are invited for subscription by all investors and their units are listed on stock exchanges. Both retail and institutional investors can trade these units.
  • Privately Placed InvITs: These are offered privately, usually to institutional investors and qualified buyers, and may not be freely traded on stock exchanges.