Sources say NHAI InvIT plans to raise 80-90 bln rupees debt Jan or Feb
Informist, Thursday, Dec 21, 2023
By Subhana Shaikh
MUMBAI – National Highways Infra Trust, the infrastructure investment trust of the National Highways Authority of India, plans to raise around 80-90 bln rupees of debt in January or February, officials aware of the development told Informist today.
The infrastructure investment trust is looking to raise funds through bank loans and bonds--both through public issue and private placement, one of the sources said.
"See, the total debt that we are looking to raise is 8,000-9,000 crores (80-90 bln rupees) and out of that how much would be through bonds, we are still working out the numbers," another official involved with the transaction said.
The trust is looking to issue long-term bonds, which would have a maturity of 15–18 years, where demand from insurance companies is expected to be strong. "We are still fine-tuning which route will be through 15 years or 18 years," the official said.
Overall, the trust plans to raise funds around 150-160 bln rupees, which would be a mix of debt and equity.
NHAI InvIT has so far not borrowed anything in the current financial year, the official said, adding that the borrowing is linked to acquisitions of NHAI portfolio.
"NHAI has added more roads to the portfolio, so now we are renewing the offer, so we expect that to happen in January and a part of that would be funded through bonds, the official said. "The timing of that would be closer to January-end or February as compared to December or January, which we were thinking of earlier."
The proceeds of the bond issuances will be used for paying the concession fees to NHAI.
In October 2022, National Highways Infra Trust raised 15 bln rupees through a public issue of bonds, which were rated AAA by CRISIL Ratings. The trust had raised funds through bonds maturing in 13 years, 18 years and 25 years, that had a separately transferable and redeemable principal parts structure.
The infrastructure investment trust is sponsored by NHAI, which monetises national highway projects through the toll-operate-transfer, infrastructure investment trusts, and securitisation routes.
Under the toll-operate-transfer model, NHAI gives toll collection rights and operation and maintenance obligations to private companies in return for an upfront payment of lump sum concession fees.
In the InvIT route, assets are transferred to a trust, which is kind of a collective investment scheme similar to a mutual fund. An InvIT enables direct investment from individual and institutional investors into infrastructure projects to earn a portion of the income as return.
The last time NHAI tapped the bond market on a private placement basis was in March 2022, when it had raised 39.41 bln rupees through 15-year bonds at a coupon of 7.12%.
On Thursday, CareEdge Ratings assigned 'AAA' rating to National Highways Infra Trust's long-term instruments worth 5 bln rupees and reaffirmed 'AAA' rating on its long-term bank facilities worth 73.50 bln rupees and 15-bln-rupee non-convertible debentures. End
