NHAI Settles Rs 15,700 Crore Debt, Saves Rs 1,000 Crore In Interest

In a significant move to reduce its debt burden, the National Highways Authority of India (NHAI) has successfully pre-paid loans amounting to Rs 15,700 crore ahead of schedule, the Ministry of Road Transport & Highways announced on Tuesday. This strategic repayment is expected to yield substantial interest savings of approximately Rs 1,000 crore.

With this pre-payment, NHAI's outstanding debt has decreased to around Rs 3.2 lakh crore. This development marks a crucial step in the authority's ongoing efforts to manage its financial liabilities effectively.

Key takeaways from the development include NHAI's monetisation plans, where the authority responsible for the development, maintenance, and management of the National Highways across India aims to monetise projects worth Rs 15,000-20,000 crore through Infrastructure Investment Trusts (InvIT) in the current financial year, marking a potential increase of up to 27.4 per cent over the Rs 15,700 crore generated through InvIT in FY24, which concluded on March 31, 2024.

According to the ministry, the proceeds from InvIT monetisation activities are exclusively earmarked for NHAI's debt repayment, and achieving the Rs 15,000-20,000 crore target could reduce the authority's overall debt to around Rs 3 lakh crore by the end of FY25. Additionally, NHAI has been proactively engaging with its lenders to lower applicable interest rates, resulting in banks reducing their interest rates from 8.00-8.10 per cent to 7.58-7.59 per cent. During this process, NHAI repaid Rs 15,700 crore in bank loans where interest rates could not be further reduced, leading to significant interest savings of around Rs 1,000 crore.

This financial manoeuvring is part of NHAI's broader strategy to streamline its debt portfolio and ensure long-term fiscal sustainability. The authority's efforts to lower interest rates and pre-pay high-cost loans demonstrate a commitment to prudent financial management while continuing to focus on the expansion and maintenance of India's national highways network.