CRISIL assigns AAA/Stable rating to NHAI's debt
Mumbai, Apr 5: The rating agency, CRISIL, has assigned ''AAA/Stable'' rating to the National Highway Authority of India's Long Term Borrowing Programme of Rs 8000 crore, while reaffirming a similar rating to its other Rs 5593 crore Taxable Bond Programme.
Stating this, a CRISIL press release said that the rating is based on NHAI's strategic importance as the Government of India's nodal agency for the development of the road sector in India, and GoI's continued financial support to NHAI.
Further, the rating agency expects that the road sector, as the backbone of transport infrastructure in India, will continue to be a focus area for GoI, and will gain in priority going forward. The implementation of the National Highway Development Programme (NHDP) needs to gain considerable momentum for sustained GDP growth of over eight per cent to be achieved.
The Government has entrusted NHAI with the task of executing the seven-phase NHDP; this programme entails building, upgrading, and maintaining more than 50,000 km of national highways at a cost of Rs 1466 billion. Phases 1, 2 and 3A are in various stages of implementation, and Phases 3B, 4, 5, 6, and 7 are still in the planning stage.
GOI's financial support to NHAI consists of a significant flow of equity funds through budgetary allocations, an earmarked cess, market borrowings carrying capital gains tax benefits, and capital grants. GoI collects a road cess of Rs 2 per litre on petrol and diesel; of these collections, more than 50 per cent is deployed in the development of National Highways.
The stable outlook on the rating reflects CRISIL's expectation of continued direct and indirect GoI support to NHAI.