The National Highways Authority of India (NHAI) is planning to retire more than Rs 35,000 crore debt before maturity this financial year to bring it down below Rs 2 lakh crore. The debt reduction through pre-payment is continuation of the policy that started in the last financial year when a staggering Rs 86,000 crore was repaid.
So far in this financial year the highway builder had reduced its debt by Rs 7,290 crore through redemption of the bonds on maturity. This has brought down the total debt of NHAI to Rs 2.35 lakh crore.
Last year’s repayment included Rs. 50,000 Crore from National Small Savings Fund.
Drastic Liability Reduction
“In line with GoI Policy, NHAI has not borrowed since 2023 and debt outstanding has reduced drastically since then the debt liability was reduced by around 32%,” officials said.
At its peak in 2021-22 the total outstanding debt of the NHAI had ballooned to Rs 3.48 lakh crore before the government put an end to fresh borrowings. By the end of 2023-24 the total debt of NHAI stood at Rs 3,35,173 crore. The last tranche of loans of Rs 700 crore through bonds was raised by NHAI in 2022-23.
“Due to proactive negotiation with banks NHAI was able to reduce its interest burden by refixing interest rates lower by about 80 basis points during the last two years which resulted in savings above Rs 3,500 Crore,” the officials added.
As borrowings were not allowed, the government picked up the costs of highway development while creating alternate revenue streams in the form of asset monetization.
Proceeds of monetisation of highways through infrastructure investment trust are exclusively used for debt repayment. This financial year two rounds of monetisation through InvITs are planned. One through private InvIT National Highways Infra Trust (NHIT) and another through public InvIT Raajmarg Infra Investment Trust.
Through NHIT two highway stretches of 311 km will be monetised by NHAI. Together they have the potential to bring in around Rs 6,500 crore. The work on the public InvIT – Raajmarg Infra Investment Trust (RIIT) – has also picked up after obtaining required regulatory clearances. The public InvIT will be launched in the middle of next month.
The plans are to raise around Rs 7000 crore to Rs 8000 crore through RIIT.
Opportunities for Retail
Through the public InvIT NHAI is planning to monetise 1500 km of highways in next three to five years. The public InvIT will be open to retail investors for investments on the equity side. NHIT has raised funds from the public only once in the past, that too as debt in 2022. Through NHIT the NHAI has so far raised Rs 43,638 crore by monetising 2,345 km of road assets in four rounds. This will be the fifth round of InvIT.
This financial year the NHAI is aiming to raise around Rs 40,000 crore from monetisation through functional road assets. So far it has raised Rs 12,357 crore from two rounds of monetisation through Toll Operate Transfer (ToT) mode. The bids for ToT bundles 19,20,21 and 22 are still open and will be concluded in this financial year itself.
For 2025-26 the NHAI has identified 24 road assets with a total length of 1472 km for monetisation through ToT and InvIT. Around Rs 30,000 crore will come from ToT and InvIT the remaining will be raised through asset backed securitisation. In 2024-25 the highway builder raised Rs 28,724 crore through monetisation.