The fundraise will kick off in the coming two to three months, these people added. The move comes as top-rated issuers increasingly tap the bond market to capitalise on falling yields.
Currently, the trust has about ₹21,700 crore of outstanding debt–mostly bank loans–with a blended cost of borrowing around 8% per annum. The loans are from State Bank of India, Punjab National Bank, Axis Bank, and IDBI Bank, among others, per data from Care Ratings Ltd.
NHIT can prepay up to ₹9,000 crore of bank loans without attracting pre-payment penalties, one of the persons cited above said, requesting not to be identified as the fund-raising discussions are private.
The second person said the trust is likely to raise most of the money as zero-coupon bonds (ZCBs) with staggered maturities of three to 10 years to avoid all of them coming due at the same time. ZCBs are issued at a deep discount to face value and redeemed at face value, with no periodic interest payments.
Brokers have already started pitching some of these bonds to insurance companies, the second person said. The trust currently has outstanding zero-coupon bonds worth ₹2,031 crore.
The first person cited above said that the plans are still at an early stage and may change depending on market conditions.
The trust did not respond to Mint’s request for a comment on the planned fundraise.
Expert views
NHIT’s loans and bonds are rated AAA. According to a Care Ratings report on 12 March, they continue to derive strength from “experienced and established track record of the trust’s sponsor – National Highways Authority of India – in the roads and highways sector and its strategic importance to the Government of India (GoI) as a proposed vehicle for monetising road assets”.
Experts said most public sector companies are seeking Central Board of Direct Taxes (CBDT) approval to issue 10-year ZCBs with capital gains benefits, but investors still want a stronger yield pick-up for committing to long duration with no interim cash flows, prompting issuers to keep issue sizes small.
“Highly-rated corporates—say AAA—are also exploring ZCB refinancing in today’s low-rate climate, offering stronger credit comfort but still facing potential liquidity concerns given the nature of the instrument,” said Venkatakrishnan Srinivasan, founder and managing partner of financial advisory firm Rockfort Fincap LLP.
Srinivasan said banks largely avoid investing in ZCBs in line with Reserve Bank of India’s (RBI) caution and, like banks, insurers—though they can consider them—may remain wary of long-term ZCBs even from top-notch credits.
Top-rated companies are turning to the bond market as falling yields tempt, posing a challenge for lenders longing for a recovery in corporate borrowing,Mintreported on 5 June. Companies raised ₹9.87 trillion in bonds in FY25, and ₹3.5 trillion in the first four months of FY26, showed data from the Securities and Exchange Board of India (Sebi).
Understanding NHIT
NHIT is an infrastructure investment trust (InvIT) set up by National Highway Authority of India (NHAI) in 2020 for monetizing national highway assets by allowing investors to earn returns from toll revenues.
The InvIT has so far invested ₹46,000 crore across four rounds of monetization to acquire concessions for 26 operating toll roads across 12 states. The concession periods of these roads range between 20 and 30 years.
Unit holders in NHIT include Canada Pension Plan Investment Board (CPPIB), Ontario Teachers’ Pension Plan Board (OTPPB), Employees’ Provident Fund Organisation (EPFO), L&T PF, Rajasthan Rajya Vidyut Karamchari PF and Indian Oil Corporation PF. Insurance companies and mutual funds also hold NHIT units.
Following the success of NHIT, which is a private trust with institutional investors, NHAI is planning a second InvIT focused on retail investors, Mint earlier reported. NHAI has already appointed an executive search firm to appoint executives for the new InvIT, the second person cited earlier said.
Earlier, NHIT took a ₹179 crore write-down related to seven roads within a year of acquiring them from NHAI. Acquired for over ₹16,000 crore in the third round of asset monetization, the assets are housed under a special purpose vehicle called NHIT Eastern Projects Private Limited (NEPPL).
The quick write-down prompted proxy advisory firm Institutional Investor Advisory Services (IiAS) to question the quality of the valuation exercise when acquiring the assets.
“Within just one year of acquisition, the carrying value of NHIT’s investment in NEPPL has been reduced by ( ₹179 crore) due to impairment,” IiAS noted in its report dated 9 July. “The company must articulate the changes in variables that resulted in the impairment loss.”
The impairment was an accounting provision made in accordance with applicable regulations and was consistent with the standard impairment treatment followed by all business trusts, a spokesperson for NHIT told Mint last week.
The recoverable value of the investment may fluctuate due to movements in the risk-free rate. This provision does not impact cash flows or investor returns, the spokesperson said, pointing Mint to similar impairments made by three other InvITs.
