The National Highways Authority of India (NHAI), under the Ministry of Road Transport & Highways, generated Rs 15,700 crore in the financial year 2023-24 through its Infrastructure Investment Trust (InvIT), which was then used for pre-payment to bank loan, and thus helped save Rs 1,000 crore on interest.
In an official statement, issued on Tuesday, the Ministry said that it was a major step to reduce the overall debt liability of the NHAI.
“…NHAI achieved a significant financial milestone with the successful pre-payment of bank loan amounting to Rs 15,700 crore. Retiring this debt ahead of schedule will result in an estimated interest savings of around Rs 1,000 crore,” the Ministry said.
With this pre-payment, the outstanding debt liability of NHAI has come down to around Rs 3,20,000 crore.
Last month, News18 had reported that Union minister Nitin Gadkari had assured that the financial health of the NHAI is optimum and that the body has drawn up a plan to service its debt through improved inflows of toll revenue and asset monetisation and the amount raised through the InvIT mode is used exclusively for debt repayment.
As per Government of India directions, InvIT monetisation proceeds are to be exclusively used for NHAI debt repayment, the statement added.
“During the Financial Year 2024-25, NHAI intends to monetise projects worth Rs 15,000-20,000 crore through InvIT. With this, the overall debt liability of NHAI is expected to further reduce to around Rs 3,00,000 crore at the end of fiscal 2025,” it added.
As a part of the robust debt payment plan and using InvIT monetisation proceeds, NHAI has been actively engaging with the lender banks to reduce the interest rates.
As a result, banks have reduced their interest rate from 8.00-8.10% to 7.58-7.59%. In this process, bank loans where interest rates could not be reduced have been repaid Rs 15,700 crore and this will result in significant interest savings of around Rs.1,000 crore, the Ministry explained.
“NHAI remains steadfast in its mission to enhance the efficiency of India’s National Highway infrastructure. Robust asset monetisation proceeds along with effective financial planning indicate strong financial performance of NHAI. The savings realised from this debt reduction will play a pivotal role in advancing ongoing and future National Highway projects,” it added.
In 2014-15, the outstanding debt of the NHAI was Rs 23,355.66 crore. It increased by 15 times to Rs 3,35,173.38 crore at the end of 2023-24. The outstanding debt on the NHAI in 2017-18 was Rs 1,21,931.34 crore, the Ministry documents show.
InvIT was launched by the NHAI as a mode to monetise operational roads, as it has the largest share under the National Monetisation Pipeline. In its first offering, NHAI InvIT had attracted two international pension funds, namely Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board, as anchor investors.
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