Delhi-Mumbai Expressway raises Rs 5,000 cr through maiden bond offering
- ByStartupStory | March 15, 2022
A wholly-owned entity of the National Highways Authority of India (NHAI), DME Development Limited (DMEDL), raised Rs 5,000 crore through a maiden 15-year bond offering with variable coupon rates.
The bond was priced at 6.85 percent, with a basic size of Rs 1,000 crore plus green shoe worth Rs 4,000 crore. On the three-month treasury bill plus fixed spread of 311 basis points, the coupon would be reset in each quarter based on the yield, said bond dealers.
With stable outlook, the rating agency CARE reaffirmed “AAA” in february 2022. By March 2023, the Delhi-Mumbai stretch is targeted to be completed. Spur to Jawaharlal Nehru Port Trust (JNPT), the last section of the highway, is envisaged to be completed by September 2023.
At about Rs 87,453 crore (including the land acquisition cost proposed to be borne by NHAI)is the total estimated project cost envisaged. The finance required for the development of the Delhi-Vadodara section on EPC basis and for the development of the Vadodara-Mumbai section on HAM basis by upfront commitment required will be raised by DMEDL.
The Letter of Comfort (LoC) from NHAI has supported the ratings in favour of the lenders financing the project. At least 51 per cent stake will be retained by NHAI in the company and in case of any shortfall in funding plan to infuse additional equity or arrange for term facilities.
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