States such as Maharashtra, Gujarat and Tamil Nadu are preparing to launch independent InvITs, while Rajasthan is in advanced talks with the National Highways Authority of India (NHAI) to pool its assets under a central road development arrangement, the sources told Reuters.
The finance departments of the states did not immediately respond to a Reuters email seeking comment.
InvITs are an alternative to traditional financing methods as they allow the sponsor to recycle capital and fund new infrastructure.
The move will attract a wider investor base, deepen market participation, and create fresh opportunities for long-term capital, said NS Venkatesh, CEO of BIA.
Some states are also in preliminary talks with the National Bank for Financing Infrastructure and Development (Nabfid) to support their trusts, one source said.
The federal government has monetised assets worth 926.3 billion rupees over the past five years through models such as toll-operate-transfer (TOT) and an InvIT launched in 2022, according to a report by rating agency ICRA last month.
ICRA projected road monetisation between 350 billion rupees and 400 billion rupees for the current fiscal year.
“We need to see the exact structure before deciding whether they will be successful or not,“ one source said.
Maharashtra has the largest state highway network at 31,992 km, followed by Gujarat (16,557 km), Rajasthan (15,165 km), and Tamil Nadu (11,169 km) as of March 2020, according to central government data - REUTERS
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