National Highways Infra Trust to raise Rs 2,350 cr via bonds, bank loans

To fund acquisition of three projects from NHAI, with which it will sign a concession agreement for 20 years

National Highways Infra Trust (NHIT) is planning to raise up to Rs 2,350 crore through bank loans and bonds to acquire three road assets from state-owned National Highway Authority of India.

NHIT, a BSE-listed infrastructure investment trust (InvIT), already has five operational assets under its wings and now proposes to acquire Agra Bypass, the Borkhedi-Wadner-Kelapur section and the Shivpuri-Jhansi section. It will sign a concession agreement with NHAI for 20 years for them.

Of the Rs 2,350 crore funds planned to be raised, Rs 850 crore will come from long-term bank loans and Rs 1,500 crore from non-convertible debentures. CARE Ratings has assigned Provisional “AAA” with stable outlook to both facilities.

NHIT has a sanctioned debt of Rs 2,000 crore for a period of 20 years, of which it has raised Rs 1,480 crore till March 2022. Besides, the InvIT has raised capital of Rs 6,011 crore.

While the existing projects have an operational track record of 12-18 years, the additional assets are also mature toll road projects with proven track record of operations of 5-13 years.

The InvIT's existing portfolio consists of five road project assets--Palanpur-Abu Road, Abu Road-Swaroopganj, Chittorgarh-Kota, Kothakota-Kurnool and Belgaum-Kagal.

The portfolio projects are in diversified geographical locations spread across Gujarat, Rajasthan, Telangana, Andhra Pradesh, Karnataka, Uttar Pradesh, Maharashtra and Madhya Pradesh. This mitigates the InvIT’s business risk significantly by reducing the potential impact of any region-specific economic slowdown or force majeure events.

CARE Ratings said the existing five projects commenced toll collections on December 16, 2021, and reported a toll collection of Rs 139.42 crore during FY22 with an average daily toll collection (ADTC) of Rs 1.32 crore, which remained in line with the envisaged levels.

During the first quarter ended June 2022 (Q1FY23), NHIT reported a healthy toll collection of Rs 142.48 crore with an ADTC of Rs 1.57 crore. As the additional three assets are expected to be transferred under InvIT by September 2022 and contribute to toll collections from October 2022 onwards.