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Nhai’s Rs 5,000 cr tax-free bonds likely in Apr-Jun

Nhai’s Rs 5,000 cr tax-free bonds likely in Apr-Jun
PTI
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First Published: Sun, Mar 06 2011. 02 55 PM IST
Updated: Sun, Mar 06 2011. 02 55 PM IST
New Delhi: The National Highways Authority of India (Nhai) is likely to issue tax-free bonds worth around Rs 5,000 crore in the first quarter of the next fiscal to part fund land acquisition and annuity payments among others.
“The government will allow us to raise tax-free bonds worth Rs 10,000 crore in 2011-12. We will raise the fund in two tranches and expect to issue the first tranche of around Rs 5,000 crore in the first quarter of the next fiscal,” Nhai member (finance) J N Singh told PTI.
Finance minister Pranab Mukherjee in his Budget 2011-12 had said that the government would allow Nhai to raise tax-free bonds worth Rs 10,000 crore in 2011-12.
Singh said that the fund would be used for acquisition of land, meeting the viability gap funding and committed annuity payments among others.
The second tranche would be issued in the last quarter of 2011-12, depending upon the market conditions, he added.
“This is certainly a very good step and will allow us to go for cheaper finances. We expect the costs to go down by 2% to about 7% on present market conditions,” he said.
Nhai is already in the market with its 54EC capital gains tax exemption bonds, having an interest of about 6 per cent.
However, the tax-free bonds proposed in the Budget are for long-term financing. 54EC capital gains tax exemption bonds are redeemable after 3 years only, he said.
Nhai is engaged in the task of building highways in the country and has plans to construct 35,000 km of highways in the next 4-5 years.
It has estimated an investment of about $70 billion (over Rs 3 lakh crore) for the construction of highways in the country of which USD 40 billion is expected to come from the private sector.
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First Published: Sun, Mar 06 2011. 02 55 PM IST