The National Highways Authority of India has drawn up a plan to bring down its debt to below 50% of the current outstanding by 2029-30, with asset monetisation through National Highways Infra Trust (InvIT) taking on a big role in the repayment of principal amounts.
NHAI had a total debt of Rs 3.43 trillion at the end of March 2023; its repayment liability will peak at Rs 62,000 crore in 2027-28 before declining sharply. The years that will see maximum redemption and interest payment pressure would be from 2026-27 to 2028-29.
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“Of the total outstanding, Rs 1.81 trillion will be repaid between 2023-24 and 2029-30. The entire outstanding debt of NHAI will be cleared by 2049-50, but beyond 2029-30, the pressure of repayment will be much less,” an official who did not wish to be identified said.
“Even in the years when repayment will peak, NHAI’s earnings from toll and fund raising through InvIT would be able to cover the debt liabilities substantially,”he said.
The official said despite much debate over the overall debt of NHAI, the debt-equity ratio is 0.7:1 and rating agencies have rated the debt at AAA. “The debt on board and capital of Rs 4.95 trillion have enabled construction of assets worth Rs 8.46 trillion,” he added.
“Debt reduction has started and as per present situation there shall be no further increase in debt liability of NHAI,” the official said.
Even now NHAI is adding 5,000 km of tollable roads every year and toll collections are expected to grow at least 10% a year for the next few years, the official said. While toll collections are expected to be around Rs 20,000 crore this year, the InvITs are expected to add at least Rs 15000 crore a year to the debt servicing kitty.
“It has been prescribed that funds raised through InvIT shall be used by NHAI exclusively for deb servicing,” the official said. The next round of NHAI InvIT to monetise six stretches of highways is expected to fetch Rs 7,000-8,000 crore by July. During the year more rounds of InvIT would follow.
“Road construction is going on at present also and once the construction of roads is completed toll revenue shall be used for debt repayment and construction of roads,” he added.
Another revenue source opening up for NHAI in the coming years is return of Build Operate Transfer (BOT) projects on the completion of concession period. The BOT projects started in a big way from 2005 and many of them are nearing the end of the concession period.
The official said there are 150 BOT projects and all will come back during the next 10 years.