C.P. Joshi, the Union Minister for Road Transport & Highways, has announced that National Highways Authority of India (NHAI), an autonomous body under Ministry of Road Transport & Highways is going to raise upto Rs. 10,000 crores through Public Issue of Tax Free Secured Redeemable Non Convertible Bonds. He said that 29 PPP projects have been awarded by NHAI till November 30, 2001, out of which 27 on BOT (Toll) in addition two projects on BPT (Annuity). About 21000 kms of roads to be awarded by NHAI in next 3 financial years as per Work Plan considered for revised financial projections. He also said that about 4200 km length of roads have been awarded by NHAI up to November, 2011 against a target of 7300 km for financial year 2012. Peak cumulative outstanding debt is expected to be Rs. 57000 crores in 2016-17 as per the revised financial projections for the implementation of NHDP. The proposed tax free bonds of Rs. 1000 crores will be one part of the market borrowings, he added.
The issue opens on 28th December, 2011 and is expected to remain open for 14 days (minimum 3 days). The issue will be of Rs. 5000 crores with a green shoe option to retain additional Rs. 5000 crores. The coupon rates will be 8.2% for 10 years and 8.3 % for 15 years. To benefit retail investors, 30% of the Bonds issue has been reserved for them. NHAI intends to deploy the Issue proceeds towards financing of the various projects being implemented by it under the NHDP and other NH projects as approved by Government of India.
NHAI is entrusted with management of a network of 70,934 km of National Highways in India. It has been authorized by the CBDT notification to raise funds upto 10,000 Crore through public issue of Tax Free Secured Redeemable Non Convertible Bonds of face value of Rs. 1,000 each in the nature of Debentures having tax benefits under the Section 10(15)(iv)(h) of the Income Tax Act, 1961, as amended, in one or more tranches in the Financial Year 2011-12.. For this purpose, it has filed the Draft Shelf Prospectus dated November 23, 2011, Shelf Prospectus dated December 13, 2011, Addendum to the Shelf Prospectus dated December 22, 2011 and Prospectus Tranche -1 dated December 22, 2011 (referred as the “Prospectus”) with the designated stock exchange, BSE Limited (“BSE”). The Prospectus has been filed with the National Stock Exchange of India Limited (“NSE”) and Securities and Exchange Board of India (“SEBI”) also. The Issue size under Tranche-1 aggregates to ` 5,000 crores with an option to retain over-subscription upto Rs. 10,000 crores.
These Bonds are being issued in two series viz. Tranche 1 Series 1 and Tranche 1 Series 2 having a tenure of 10 years and 15 years respectively. The coupon rate for the Tranche 1 Series 1 and Tranche 1 Series 2 would be 8.20% per annum and 8.30% per annum respectively. The interest is payable annually on October 1st of each year.
The Tranche 1 Bonds proposed to be issued have been rated as ‘CRISIL AAA/Stable’ by CRISIL, `CARE AAA` by CARE and ‘FITCH AAA (IND) with stable outlook’ by FITCH. The rating of the Bonds issued by CRISIL and CARE indicate highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. The rating of the Bonds by FITCH indicates highest rating assigned in its national rating scale. This rating is assigned to the "best" credit risk relative to all other issuers or issues in the country. The Bonds offered through this Issue are proposed to be listed on the BSE and the NSE.
The Issue shall remain open from December 28, 2011 to January 11, 2012 with an option to close earlier or extend up to a maximum period of 30 days at the discretion of the Board of NHAI subject to necessary approvals, by intimating through an advertisement issued in a leading national daily. However, the Issue shall remain open for a minimum of 3 days. The funds raised through this Issue will be used for part financing of the various projects being implemented by NHAI. SBI Capital Markets Limited and A.K. Capital Services Limited are the Lead Managers to the Issue. Additionally, ICICI Securities Limited and Kotak Mahindra Capital Company Limited are also involved for marketing of the Issue.