Mumbai: The National Highways Authority of India (NHAI) will raise Rs1,000 crore by issuing tax-free, non-convertible bonds with a face value of Rs1,000 each, the state-owned builder of expressways said on Wednesday.
The funds raised through the issue will be used to finance ongoing projects under the National Highways Development Project and future projects to be awarded under different types of contracts, NHAI said. It will have option to retain oversubscription of up to an additional Rs9,000 crore, totalling Rs10,000 crore.
The issue will be open between 17 and 31 December with an option for early closure or extension that will decided later, NHAI said.
The bonds are proposed to be listed on BSE and the National Stock Exchange. The interest income on the bonds is exempted from income tax in the hands of the investors, as per a 6 July notification issued by the Central Board of Direct Taxes.
The NHAI is the implementing agency of the roads ministry for awarding and building national highways. The NHDP, implemented in 1998, is a project to upgrade, rehabilitate and widen major highways in India.
Awarding of road projects gathered momentum in 2015-16, with $5.7 billion worth of contracts awarded by NHAI till September, said a 26 November report by J.P. Morgan, an investment banker.
The coupon rate for qualified institutional buyers, corporates and wealthy individuals will be 7.14% and 7.35% for tenures of 10 and 15 years, respectively. The rate for retail individual investors will be 7.39% and 7.60% for tenures of 10 and 15 years, respectively, the statement said.
SBI Capital Markets Ltd, A.K. Capital Services Ltd, Edelweiss Financial Services Ltd, ICICI Securities Ltd and Axis Capital Ltd are lead managers to the issue.
Karvy Computer Share Pvt. Ltd is the registrar to the issue while SBICAP Trustee Co. Ltd is the bond trustee to the issue.