The National Highways Authority of India (NHAI), operating under the Ministry of Road Transport & Highways, achieved a significant financial milestone in the fiscal year 2023-24. Through its Infrastructure Investment Trust (InvIT), NHAI generated Rs 15,700 crore, which was utilized for the pre-payment of bank loans. This strategic move helped save approximately Rs 1,000 crore in interest.
Reduction in Debt Liability
In a statement issued on Tuesday, the Ministry of Road Transport & Highways highlighted that this action was a major step towards reducing NHAI’s overall debt liability. The pre-payment of Rs 15,700 crore led to a notable decrease in the outstanding debt, which now stands at approximately Rs 3,20,000 crore.
Financial Health and Future Plans
Union Minister Nitin Gadkari recently assured that NHAI’s financial health is optimal. The authority has planned to service its debt through improved toll revenue inflows and asset monetization. The amount raised through InvIT is earmarked exclusively for debt repayment.
According to Government of India guidelines, proceeds from InvIT monetization are to be used solely for repaying NHAI’s debt. For the Financial Year 2024-25, NHAI aims to monetize projects worth Rs 15,000-20,000 crore through InvIT, which is expected to reduce the overall debt liability further to around Rs 3,00,000 crore by the end of fiscal 2025.
Interest Rate Reduction and Debt Management
In line with its robust debt payment plan, NHAI has engaged actively with lender banks to negotiate lower interest rates. Consequently, banks have reduced their interest rates from 8.00-8.10% to 7.58-7.59%. Loans where interest rates could not be lowered have been repaid, resulting in significant interest savings of around Rs 1,000 crore.
Historical Debt Overview
NHAI’s outstanding debt has seen substantial growth over the years. In 2014-15, it was Rs 23,355.66 crore, which surged to Rs 3,35,173.38 crore by the end of 2023-24. By comparison, in 2017-18, the outstanding debt was Rs 1,21,931.34 crore.
InvIT and International Investment
InvIT, launched by NHAI to monetize operational roads, plays a significant role under the National Monetisation Pipeline. In its inaugural offering, NHAI InvIT attracted two prominent international pension funds: the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan Board, which served as anchor investors.
Future Prospects
NHAI remains committed to enhancing India’s National Highway infrastructure. The effective use of asset monetization proceeds and strategic financial planning are expected to drive strong financial performance and support ongoing and future National Highway projects.
