NHAI’s innovative method of raising finance

These days there is so much fuss about non-performing assets….Insolvency bill has been made applicable...A few days back RBI identified 12 big NPA’s that may be put under the hammer of insolvency….Banks are not willing to lend to corporates fearing any fresh advance may turn bad….Then who will make an investment in infrastructure sector?? How will we able to able to beat China in infrastructure development??

National Highway Authority of India, the Government’s road making company, came up with an innovative idea….It thought i shall be the one to take initiative to revive the infrastructure cycle….

Everyone knows few things are inevitable in infra projects...Like delay in approval, delay in completion coupled with inflated cost of completion….So, again the same question crops up, how will fund NHAI?? Who is the brave heart soul to take that plunge??

To our dismay, NHAI didn’t find anyone….

Hmmmmm…...Have you heard about gold loan…??

Or LAP...Loan Against Property…

Medium and small businesses often opts for these two methods to fund their working capital requirements….They pledge the gold or some property to obtain loan from banks…

Bingooo…..In similar fashion, NHAI thought why not to monetise our completed projects….Completed projects involves no risks….Such projects are toll highways which generates recurring toll revenue for NHAI….These projects will offer twin benefits of completion and of generating revenue regularly…

NHAI gave name of “TOT” to fantastic idea of its...TOT stands for Toll-Operate-Transfer….

Its win-win for both...NHAI will receive upfront fee by monetising its assets which will be invested in new assets while, the investor in TOT will make money through receipt of annual toll revenue... Its also making news these days that various foreign investors like Canadian pension plan, Macquaire group is interested in this TOT proposal…

CRISIL, the credit rating specialist, said that as much as Rs 40,000 crores can be generated through leasing of completed projects of NHAI...By garnering of such stupendous amount, NHAI can invest in other upcoming projects and participate in growth of Indian economy….

Private infrastructure players are also toying with this idea of NHAI...However they plan to do the same by way of InVIT’s….

Now what’s InVIT’s…..For that wait for my next article….

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NHAI’s innovative method of raising finance

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National Highway Authority of India, the Government’s road making company, came up with an innovative idea….It thought i shall be the one to take initiative to revive the infrastructure cycle….Everyone knows few things are inevitable in infra projects...Like delay in approval, delay in completion coupled with inflated cost of completion….So, again the same question crops up, how will fund NHAI?? Who is the brave heart soul to take that plunge?? To our dismay, NHAI didn’t find anyone…. Hmmmmm…...Have you heard about gold loan…??Or LAP...Loan Against Property…Medium and small businesses often opts for these two methods to fund their working capital requirements….They pledge the gold or some property to obtain loan from banks…<img class="image-in" src="blob:https://www.thakurani.in/d2e69ae6-ed15-4a02-8475-e61326208740"> Bingooo…..In similar fashion, NHAI thought why not to monetise our completed projects….Completed projects involves no risks….Such projects are toll highways which generates recurring toll revenue for NHAI….These projects will offer twin benefits of completion and of generating revenue regularly… NHAI gave name of “TOT” to fantastic idea of its...TOT stands for Toll-Operate-Transfer….Its win-win for both...NHAI will receive upfront fee by monetising its assets which will be invested in new assets while, the investor in TOT will make money through receipt of annual toll revenue... Its also making news these days that various foreign investors like Canadian pension plan, Macquaire group is interested in this TOT proposal… CRISIL, the credit rating specialist, said that as much as Rs 40,000 crores can be generated through leasing of completed projects of NHAI...By garnering of such stupendous amount, NHAI can invest in other upcoming projects and participate in growth of Indian economy…. Private infrastructure players are also toying with this idea of NHAI...However they plan to do the same by way of InVIT’s…. Now what’s InVIT’s…..For that wait for my next article….

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NHAI’s innovative method of raising finance