Delhi-Mumbai Expressway Development Limited (DMEDL), a wholly-owned entity of the National Highways Authority of India (NHAI), has raised Rs 5,000 crore via a maiden 15-year bond offering with variable coupon rates.

The bond, with a basic size of Rs 1,000 crore plus greenshoe of Rs 4,000 crore, was priced at 6.85%. The coupon would be reset each quarter based on the yield on the three-month treasury bill plus a fixed spread of 311 basis points, as per the bond dealers.

In February this year, the rating agency CARE reaffirmed “AAA” with a stable outlook. The Delhi-Mumbai stretch is aimed to be achieved by March next year. The last section of the highway, i.e., spur to Jawaharlal Nehru Port Trust (JNPT), is envisaged to be achieved by September 2023.

The total estimated project cost is envisaged at around Rs 87,453 crore (comprising the land purchase cost offered to be borne by NHAI).

DMEDL will raise the finance needed for the growth of the Delhi-Vadodara section on an EPC basis and the upfront commitment needed for the development of the Vadodara-Mumbai section on a Hybrid annuity model (HAM) basis.

The rating is backed by the Letter of Comfort (LoC) from NHAI in favour of the lenders funding the project.

NHAI will retain at least a 51% stake in the firm and invest additional equity or arrange for term facilities in case of any shortfall in the funding plan.

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