The Inland Waterways Authority of India (IWAI) is planning to raise R1,000 crore via a bond issue in two separate tranches. The first issuance of R500 crore will be in December, while another R500 crore will be raised in February 2017.
It has recently received the letter of approval from the government towards this. Amitabh Verma, chairman, IWAI, told FE, “Some preparatory activities were required which we have done and now, we have got the letter of approval. We have never gone to the market earlier. It will be an experience to understand the process, raise funds and build market confidence. From next year, more money will be raised.”
The Comptroller and Auditor General of India (CAG) has audited IWAI’s balance sheets and has already submitted its report. IWAI is currently in the process of appointing a credit rating agency subsequent to which it expects to complete the appointment of the lead managers for the issue by the end of October. The bonds will be guaranteed by the government and will be privately placed with banks and financial institutions. The coupon rate will be slightly higher than the 10-year G-sec rate prevalent then and which is currently at around 6.8%.
IWAI has a slew of projects lined up to improve the river and waterways infrastructure within the country. It is also in talks with multilateral funding agencies such as Japan International Cooperation Agency (JICA) and Asian Development Bank (ADB) for its funding requirements.
The World Bank has already provided over R4,000 crore in funding for developing National Waterway 1 (river Ganges). For the current financial year, IWAI has R1,325 crore which is being deployed in various projects. Its requirement next year will increase to R2,500 to R3,000 crore, Verma told FE.
“Many projects are currently in the very early stages with their detailed project reports (DPRs) still being prepared. The major requirement for funds will be from 2018-19, when our requirement will suddenly increase. We need to tie up these funds by then,” he added.
Apart from this, IWAI is also garnering support through partnerships with state governments. The Andhra Pradesh government has already agreed to sign an agreement with IWAI where the former will hold 49% and the latter, 51% stake.