A plan to trim NHAI's debt mountain is cooking
₹3.4 trillion debt, two people aware of the plan said. The Centre may soon begin talks with NHAI’s long-term bond holders for the prepayment, the people cited above said on condition of anonymity. The move would allow NHAI to deploy more capital for strengthening the highway network, and bring down interest payments, which are taking up a big chunk of the government’s annual budget allocations.
“Prepayment of NHAI bonds is among the options being considered for reducing highway developer’s debt," the first of the two persons cited above said. “However, this will depend on investors’ willingness to forgo high interest-bearing bonds. An earlier attempt to retire bonds prematurely, had found limited interest among investors." NHAI raised funds through fixed coupon rate bonds with tenures of five, 10, 15, 20, 25 and 30 years, respectively.
Several of these bond issues, the last of which came in FY22, are maturing between 2025 and 2030. The plan is to retire these bonds first before looking at giving early exit to long-term bond holders having payers with maturity extending up to 2040, the second person mentioned above said. Spokespersons of the finance and road ministries, and the National Highways Authority of India (NHAI) didn’t respond to emailed queries.
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