The National Highways Infra Trust (NHIT) has launched a public issue of its secured, rated, listed, redeemable, non-convertible debentures (NCDs). The NHIT, backed by the National Highway Authority of India (NHAI), issued the prospectus on October 11.
The issue opens on October 17 and closes on November 7, with an option of early closure if the issue has been fully subscribed, the NHIT said.
Detailing the non-convertible debentures in a press conference, the NHIT on Thursday said the NCDs would give an effective return of 8.05 per cent semi-annually.
Independent rating agencies CARE Ratings and Research Private Limited gave them the AAA/Stable rating.
Non-Convertible Debentures
The face value of one NCD is Rs 1000. It comprises three separate transferable and redeemable principal parts (STRPP).
● STRPP ‘A’ has a face value of Rs 300 each and has a 13-year tenor.
● STRPP ‘B’ has a face value of Rs 300 and has an 18-year tenor.
● STRPP ‘C’ has a face value of Rs 400 and has a 25-year tenor.
All the STRPPs—A, B, and C—will be equal to the total aggregate of one NCD, with a face value Rs 1000. The minimum subscription amount is Rs 10,000, i.e., 10 NCDs of face value at Rs 1000 each. The NCDs will be listed on stock exchanges. So, in case someone wants to redeem out early, they can sell them. However, these are regular NCDs with no tax benefit either at the time of purchase nor during the sale.
Do note: you will need a demat account to sell these bonds after allotment.
Each STRPP will have a different International Securities Identification Numbering system (ISIN) and they can be individually traded after listing on the stock exchanges.
“For each NCD allotted, the investors will be allotted 3 STRPPs of different ISINs, which are individually tradeable post listing,” said NHIT in a press release.
From the 8th year onwards about 5 per cent of the face value of the NCD will be repaid, and it may go higher too in the future, it said.
NCD Issue Size
The NCD has a base issue size of Rs 750 crore but it has an option to retain an oversubscription amount up to Rs 750 crore, taking the issue size to Rs 1,500 crore.
JM Financial Limited, A.K. Capital Services Limited, ICICI Securities Limited, SBI Capital Markets Limited, and Trust Investment Advisors Private Limited are the lead managers, and KFin Technologies Limited is the registrar to the issue.
NCD Sale Proceeds
The NCD sales proceeds will be partially used for the infusion of debt into NHIT’s Project Special Purpose Vehicle (SPV), and repay any bridge loan, if needed. NHIT said the Bank of Maharashtra will provide a bridge loan facility at 7.25 per cent interest per annum should the need arise.
It added that the infusion of funds in SPV would help Project SPV meet its obligations under the Concession Agreements and allow it to acquire rights under the Concession Agreement.
