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- NHAI RIIT Approved By SEBI: Retail Investors Can Now Earn From National Highway Tolls
New Delhi20 minutes ago
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Now you will be able to earn profit by investing money in the national highways of the country. National Highways Authority of India (NHAI)’s new initiative ‘Highway Infra Investment Trust’ (RIIT) has received approval from market regulator SEBI.
This scheme will provide an opportunity to the common people to invest in national highway projects, where retail and domestic investors will be able to participate directly. Just like you invest money in mutual funds, now you will be able to invest money in roads and you will get a share in the earnings of toll tax collected from vehicles.
The common investor benefits from government trust.
Till now, only big companies or foreign investors were able to invest money in highway and infrastructure projects. But the main objective of this ‘Public InvIT’ is to connect retail investors (common investors).
- regular income: A large part of the income from InvIT is distributed to investors in the form of dividend. This is best for those who want slightly higher returns than bank FD.
- government trust: This is an NHAI project, so there is more government security in it.
- long term investment: It is a long term investment tool, which can give you returns in the long run.
How will this scheme work?
You can think of it as ‘rental income’. You buy units of the InvIT (like shares). This trust leases or manages the roads built with that money from the government.
The ‘toll tax’ received from vehicles plying on those roads is the trust’s income. After deducting the expenses, the remaining profit is distributed among the unit holders (i.e. you).
10 big banks will manage money
For the protection and management of your investment, NHAI has formed a company named ‘Highway Infra Investment Managers Private Limited’ (RIIMPL). The country’s 10 largest and most trusted financial institutions are its partners. That means your money will be under the supervision of experts.
These include State Bank of India (SBI), Punjab National Bank (PNB), Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank, Yes Bank, Bajaj Finserv Ventures and NaBFID (National Bank for Financing Infrastructure and Development). NHAI Member (Finance) NRVVMK Rajendra Kumar will be the MD and CEO (Additional Charge) of this investment manager company.
How will you be able to invest?
Since this will be a listed InvIT, it is necessary for you to have a ‘Demat Account’ to invest in it. When its IPO (Initial Public Offer) comes, you will be able to bid in it through your broker app (like Zerodha, Grow Angel One etc.). After listing, you will be able to buy and sell its units from the stock market also.
What is INVIT?
Infrastructure Investment Trust (InvIT) is a collective investment scheme similar to mutual fund. Just as in mutual funds, money is taken from people and invested in the stock market, similarly in InvIT, money is taken from people and invested in road, power or other infrastructure projects.
A large portion of the earnings (such as toll collection) from these projects are distributed to unit holders (investors) in the form of dividends.
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