While it is set to launch its maiden local bond sale next month, the company is also in talks with a group of local and foreign lenders including the State Bank of India (SBI), Employees’ Provident Fund Organisation (EPFO), Barclays, Citi and Morgan Stanley to raise loans.
Individual lenders and investors could not be contacted immediately. The NHAI did not respond to queries emailed by ET.
DME has obtained a letter of comfort from the NHAI for the proposed bond sale. The borrower is likely to hold an investor meeting in Delhi soon. It is a triple-A rated entity.
It is seeking to raise up to Rs 5,000 crore with likely 15-year maturity. It has already reached out to multiple domestic institutional investors including banks, bond houses, mutual and pension funds showcasing the strengths of the projects.
The bonds may have a five-year or six-year call option, an exit route for investors well before the scheduled maturity, said people aware of the matter. The bonds will be up for bidding on the NSE’s electronic trading platform. Only qualified institutional borrowers can bid.
Additionally, DME is aiming to raise up to Rs 4,000 crore loan from institutions such as India Infrastructure Finance Company, National Investment and Infrastructure Fund and EPFO.
DME is also exploring offshore fundraising. It is in talks with foreign lenders, which can extend a dollar-denominated loan under an external commercial borrowing (ECB) window for the first time.
“For Rs 4,000 crore, it could either be a combination of ECB and domestic institutions or ECB alone,” said one of the persons cited earlier.
Funding cost and currency cover are some of the factors under deliberations for the final decision.
Back home, DME is negotiating with a number of local banks to raise about Rs 9,000 crore. It has already raised an estimated Rs 2,700 crore in this financial year from banks including Bank of Baroda, Bank of Maharashtra and Indian Bank. Those loans are mostly of an 18-year maturity.
It is currently negotiating Rs 6,000 crore with the SBI, seeking a rate of 6.85% against 7% being offered.
Delhi-Mumbai project’s length is 1,380 km, with the SPV requiring to arrange nearly Rs 54,000 crore until completion of the project in October 2023.
Between Delhi and Baroda, the project is distributed among multiple segments, which are being pursued through engineering, procurement and construction contracts.
The rest of the project till Mumbai will be implemented through hybrid annuity model.
DME was incorporated in October last year with a shelf life of 30 years. The NHAI will pass on toll collections as annuity to it after the project is on stream. This adds lender or investor confidence as the NHAI is a sovereign-owned entity.
