Winning Bizness Desk
Mumbai. Common investors can now earn from the country’s national highways, as the Securities and Exchange Board of India has approved the National Highways Authority of India’s Highway Infrastructure Investment Trust. With this approval, NHAI has opened the door for retail and domestic investors to directly participate in highway projects, an opportunity that was earlier limited to large companies and foreign institutions. The new trust allows people to invest in roads in a way similar to mutual funds and earn a share from toll collections, offering the possibility of returns that may be higher than most bank fixed deposits.
What the highway investment trust offers
The core idea behind the Highway Infrastructure Investment Trust is to allow small investors to put money into completed national highway projects. Instead of building new roads, the trust will focus on operational highways that already generate toll revenue. This makes the investment relatively stable and predictable. Key benefits highlighted by NHAI include:
* Regular income through distribution of earnings from toll collections
* Backing of a government authority, which adds credibility and trust
* A long-term investment option suited for steady returns
For investors looking beyond traditional savings tools, this structure provides exposure to infrastructure without directly managing assets.
How the investment model actually works
The working of the InvIT can be compared to earning rental income. Investors buy units of the trust, much like shares. The trust uses this money to lease or manage operational highways from the government. Vehicles using these roads pay toll tax, which becomes the main source of income. After meeting operating and maintenance costs, the remaining surplus is shared among investors.
This model ensures:
* Income linked to traffic movement rather than market speculation
* Periodic payouts instead of waiting for long-term capital gains
Major banks to manage investor money
To ensure professional management and safety of funds, NHAI has set up a separate company called Rajmarg Infra Investment Managers Private Limited. This company will manage the trust’s operations and finances. Ten major financial institutions are partners in this initiative, including SBI, PNB, Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank, Yes Bank, Bajaj Finserv Ventures and NaBFID. NHAI’s Member Finance, NRVVMK Rajendra Kumar, will serve as the managing director and CEO with additional charge.
Steps retail investors must follow
Since this is a listed InvIT, investors will need a demat account to participate. Investment will be possible through the initial public offering and later through stock market trading. The basic process includes:
* Opening or using an existing demat account
* Applying for units during the IPO through a broker platform
* Buying or selling units on the exchange after listing
Understanding InvITs before investing
Infrastructure Investment Trusts are similar to mutual funds but focus only on infrastructure assets like highways and power projects. They pool money from investors and generate income from these assets. A large part of the earnings is shared with unit holders as dividends. At the fag end, experts advise investors to view this as a long-term income option, assess traffic-linked risks, and compare expected returns with bank deposits and other fixed-income products before investing.
