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- Now You Can Earn By Investing In National Highways: Sebi Approves NHAI’s Highway Trust
Now you can earn profits by investing money in the country’s National Highways (NHs). The National Highways Authority of India (NHAI)’s new initiative ‘Highway Infrastructure Investment Trust’ (RIIT) has received approval from market regulator SEBI.
This scheme will give common people an opportunity to invest in National Highway projects, where retail and domestic investors can participate directly. Just like you invest in mutual funds, now you can invest in roads and get a share in the earnings from toll tax collected from vehicles.
Common investors benefit from government trust
Until now, only large companies or foreign investors could invest in highway and infrastructure projects. But the main purpose of this ‘public invite’ is to connect retail investors (common investors).
- Regular Income: A large portion of earnings from InvIT is distributed to investors as dividends. This is excellent for those who want slightly higher returns than bank FDs.
- Government Trust: This is an NHAI project, so it has more government security.
- Long-term Investment: This is a long-term investment tool that can give you returns for an extended period.
How will this scheme work?
You can understand this as a ‘rental income’. You buy units of InvIT (like shares). This trust takes ready-made roads on lease from the government or manages them with that money.
The ‘toll tax’ collected from vehicles running on those roads becomes the trust’s earnings. After deducting expenses, the remaining profit is distributed among unit holders (meaning you).
10 Major Banks Will Manage Money
For the security and management of your investment, NHAI has formed a company called ‘Rajmarg Infra Investment Managers Private Limited’ (RIIMPL). The country’s 10 largest and most trusted financial institutions are partners in this. This means your money will be under expert supervision.
This includes 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 Can You Invest?
Since this will be a listed InvIT, you must have a ‘Demat Account’ to invest in it. When its IPO (Initial Public Offer) comes, you can bid through your broker app (like Zerodha, Groww, Angel One etc). After listing, you can also buy and sell its units from the stock market.
What is an InvIT?
Infrastructure Investment Trust (InvIT) is a collective investment scheme like a mutual fund. Just as mutual funds take money from people and invest in the stock market, InvITs take money from people and invest in road, electricity or other infrastructure projects.
A large portion of the earnings from these projects (like toll collection) is distributed to unit holders (investors) in the form of dividends.