Bharat Highways InvIT to raise Rs 3,000-crore through rupee-term loans

To retire debt of seven road projects that it will acquire

Bharat Highways InvIT (BH InvIT) plans to raise Rs 3,000 crore through rupee-term loans (RTLs) in an arrangement to repay existing debt of seven operating road assets that it is set to acquire.

These road assets are located in Punjab, Gujarat, Andhra Pradesh, Maharashtra and Uttar Pradesh.

Bharat Highways InvIT, floated by GR Infraprojects, will acquire 100 per cent stake in road projects under six special purpose vehicles (SPVs) and 49 per cent one SPV. 

These SPVs are Porbandar-Dwarka Expressway, Varanasi-Sangam Expressway, GR Sangli-Solapur Highway, GR Akkalkot-Solapur Highway, GR Phagwara Expressway and GR Gundugolanu-Devarapalli Highway. 

In GR Dwarka-Devariya Highway, it will initially acquire a 49 per cent stake, according to provisions of the concession agreement. All the assets that are proposed to be acquired are road assets under the hybrid annuity model (HAM).

After acquisition of stake by BH InvIT, the RTL at the SPVs would be repaid through term loans. 

Furthermore, two SPVs — Varanasi Sangam Expressway and GR Phagwara Expressway — would have non-convertible debentures (NCDs). It would be refinanced through the proposed RTL at the InvIT level during June 2024 and September 2024.

India Ratings (Ind-Ra) has assigned “AAA” rating to the proposed loan and taken a consolidated cash-flow approach of these seven assets. The rating is supported by a robust pool of operating assets. They have a low-revenue risk profile in the form of stable cash flows from the strong counterparty National Highways Authority of India (NHAI). 

The rating factors in inherent features of a HAM project and established track record of timely receipt of 19 annuities across six SPVs.

It also considers minimal residual construction risk, comfortable coverage ratios and high cash flow fungibility. The rating is further supported by the presence of adequate liquidity.