private & confidential for private circulation only

Serial No.: [______]

Addressed to: ______________________________________

Private & Confidential –For Private Circulation Only

Series-I IM dated April 27, 2020

NATIONAL HIGHWAYS AUTHORITY OF INDIA (An Autonomous Body under the Ministry of Road Transport & Highways, Government of India)

(Constituted on June 15, 1989 by an Act of Parliament - The National Highways Authority of India Act, 1988) Head Office: G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075 Tel: (011) 25074100, 25074200; Fax: +91-11-25093517, 25093515 Website: www.nhai.gov.in; E-mail: [email protected]

(This Series-I IM is neither a Prospectus nor a Statement in lieu of Prospectus. This Series-I IM is prepared in conformity

with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No.

LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time.

(PRIVATE & CONFIDENTIAL)

SERIES-I IM DATED APRIL 27, 2020

SERIES-I IM FOR PRIVATE PLACEMENT OF SECURED, NON-CONVERTIBLE, NON-CUMULATIVE, REDEEMABLE,

TAXABLE BONDS IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKHS EACH AT PAR

AGGREGATING TO TOTAL ISSUE SIZE NOT EXCEEDING RS. 3,000 CRORES WITH A BASE ISSUE SIZE OF RS. 1,000

CRORES AND GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO RS. 2,000 CRORES BY NATIONAL

HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”) BY WAY OF PRIVATE

PLACEMENT.

ISSUE PROGRAM

ISSUE/BID OPENING DATE ISSUE/BID CLOSING DATE PAY-IN DATE DATE OF ALLOTMENT

April 27, 2020 April 27, 2020 April 28 2020 April 28, 2020

TRUSTEE OF THE ISSUE

IDBI Trusteeship Services Limited

Asian Building, Ground Floor

17. R. Kamani Marg Ballard Estate

Mumbai – 400 001

Phone: 022 40807000

Fax: 022 66311776

Email: [email protected]

REGISTRAR TO THE ISSUE

Beetal Financial & Computer Services (P) Ltd.

99, Beetal House, Madangir, Behind Local Shopping Centre

Near Harsukhdas Mandir New Delhi – 110062

Tel: +91 11 2996 1281 - 83

Fax: +91 11 2996 1284

E-mail: [email protected]

mailto:[email protected]

TABLE OF CONTENTS

PARTICULARS PAGE NO

I. DISCLAIMER 1

II. DEFINITIONS/ ABBREVIATIONS 5

III. ISSUER INFORMATION 7

IV. DETAILS OF MEMBERS OF THE ISSUER 10

V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER 14

1) STATUTORY AUDITOR OF THE ISSUER 14

2) CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST THREE YEARS

14

VI. MANAGEMENT PERCEPTION OF RISK FACTORS 15

VII. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

37

1) OVERVIEW 37

2) STRENGTHS 38

3) STRATEGIES 40

4) ISSUER’S PROJECTS 41

5) FINANCING 44

6) CORPORATE STRUCTURE 54

VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS

55

IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

55

1) BRIEF BACKGROUND 55

2) CHANGE IN HEAD OFFICE 55

3) VISION 55

4) MAIN OBJECTS 56

5) MAJOR EVENTS 56

6) HOLDING COMPANY 56

7) THE PROMOTER 57

8) SPVs AND ASSOCIATE COMPANY 58

X. CAPITAL STRUCTURE 60

1) CAPITAL HISTORY 60

2) DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 1 YEAR

63

3) DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THELAST 1 YEAR

63

4) DISCLOSURES PERTAINING TO WILFUL DEFAULT 63

5) SHAREHOLDING PATTERN OF THE ISSUER 63

PARTICULARS PAGE NO

6) TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER 63

7) PROMOTER HOLDING IN THE ISSUER 63

8) BORROWINGS OF THE ISSUER 63

A) DEBT OUTSTANDING 63

B) TERMS OF ASSETS CHARGED AS SECURITY 72

C) TOP 10 BONDHOLDERS OF THE ISSUER 82

9) AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SPVs AND ASSOCIATE COMPANY

82

10) COMMERCIAL PAPER ISSUED BY THE ISSUER 82

11) OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/ PREFERENCE SHARES)

82

12) SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS

83

13) OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION

83

XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE 84

XII. SUMMARY TERM SHEET 85

XIII. TERMS OF OFFER 90

XIV. CREDIT RATING FOR THE BONDS 105

XV. TRUSTEES FOR THE BONDHOLDERS 106

XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED 107

XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

108

XVIII. DECLARATION 109

ANNEXURES

1. Financial Information

2. Credit Rating Letters

3. Consent of the Trustee

4. Limited review report for half year ended March 31, 2019 and 30 September 2019

5. Application Form-To be sent separate, if required

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I. DISCLAIMERS 1. DISCLAIMER OF THE ISSUER This Series-I IM is neither a Prospectus nor a Statement in Lieu of Prospectus. This Series-I IM

Document is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time. This Series-I IM does not constitute an offer to public in general to subscribe for or otherwise acquire the Bonds to be issued by National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”). This Series-I IM for the exclusive use of the addressee and it should not be circulated or distributed to third party(ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This bond issue is made strictly on private placement basis. Apart from this Series-I IM, no offer document or prospectus has been prepared in connection with the offering of this bond issue or in relation to the issuer. This Series-I IM does not intend to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued by NHAI. This Series-I IM has been prepared to give general information regarding NHAI to parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party mayrequire. NHAI believes that the information contained in this Series-I IM is true and correct asof the date hereof NHAI does not undertake to update this Series-I IM to reflect subsequentevents and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with NHAI. However, NHAI reserves its right for providing the information at its absolute discretion. NHAI accepts no responsibility for statements made in any advertisement or any other material land anyone placing reliance on any other source of information would be doing so at his own risk and responsibility. Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvalsor authorizations required by them to make an offer to subscribe for and purchase the Bonds. It is theresponsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Series-I IM should be construed as advice or recommendation by the Issuer to the Issue to subscribers to the Bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownershipand redemption of these Bonds and matters incidental thereto. This Series-I IM is not intended for distribution. It is meant for the consideration of the personto whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on private placement basis and this offer does not constitute a public offer/invitation. This Series-I IM shall be accompanied by application form serially numbered and addressed specifically to the person to whom the offer is made and shall be sent to him, either in writing or in electronic mode, within thirty days of recording the names of such persons.

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2. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This Series-I IM shall not be filed with Securities & Exchange Board of India (“SEBI”) for their approval. The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Series-I IM. It is to be distinctly understood that this Series-I IM should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Series-I IM. The Issue of Bonds being made on private placement basis, filing of this Series- I IM is not required with SEBI. However, SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Series-I IM. 4. DISCLAIMER OF THE ARRANGERS TO THE ISSUE

The role of the Arranger in the assignment is confined to marketing and placement of the Debentures/Bonds (Debentures and Bonds have been used interchangeably in this Disclaimer) on the basis of this Series-I IM (hereinafter collectively referred to as “Information Memorandum”) as prepared by the Issuer. The Arranger has neither scrutinized nor vetted nor reviewed nor has it done any due-diligence for verification of the contents of this Information Memorandum. The Arranger shall use this Information Memorandum for the purpose of soliciting subscription(s) from Eligible Investors in the Debentures to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the use and distribution of this Information Memorandum by the Arranger should not in any way be deemed or construed to mean that the Information Memorandum has been endorsed by the Arranger in any manner. It is responsibility of the Issuer to comply with all laws, rules and regulations and obtain all regulatory, governmental, corporate and other necessary approvals for the issuance of the Bonds. The Arranger has not verified whether the regulatory requirements have been fulfilled and necessary approvals have been obtained by the Issuer. The Issuer has prepared this Information Memorandum and the Issuer is solely responsible and liable for its contents. The Issuer confirms that all the information contained in this Information Memorandum has been provided by the Issuer or is from publicly available information, the use of which isn’t regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise and that such information has not been independently verified by the Arranger. No representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Arranger or any of their employees, directors or their Affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of the information or opinions contained therein, and the Arranger hereby expressly disclaims any responsibility or liability to the fullest extent for the contents of this Information memorandum, whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or any information or errors contained therein or any omissions there from. Neither Arranger and its affiliates, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of this document. By accepting this Information Memorandum, the Eligible Investor accepts this Disclaimer of the Arranger, which forms an integral part of this Information Memorandum and agrees that the Arranger will not have any such liability. The Eligible Investors should carefully read this Series-I IM. This Information Memorandum is for general information purposes only, without regard to specific objectives, suitability, financial situations

3

and needs of any particular person and does not constitute any recommendation and the Eligible Investors are not to construe the contents of this Series-I IM as investment, legal, accounting, regulatory or tax advice, and the Eligible Investors should consult with its own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Bonds. This Information Memorandum should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities mentioned therein, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This Information Memorandum is confidential and is made available to potential investors in the Bonds on the understanding that it is confidential. Recipients are not entitled to use any of the information contained in this Information Memorandum for any purpose other than in assisting to decide whether or not to participate in the Bonds. This document and information contained herein or any part of it does not constitute or purport to constitute investment advice in publicly accessible media and should not be printed, reproduced, transmitted, sold, distributed or published by the recipient without the prior written approval from the Arranger and the Issuer. This Information Memorandum has not been approved and will or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This document may not be all inclusive and may not contain all of the information that the recipient may consider material. Please note that: (a) The Arranger and/or their affiliates may, now and/or in the future, have other investment and

commercial banking, trust and other relationships with the Issuer and other entities related to the Issuer;

(b) As a result of those other relationships, the Arranger and/or their affiliates may get

information about the Issuer and/or the Issue or that may be relevant to any of them. Despite this, the Arranger and/or their affiliates will not be required to disclose such information, or the fact that it is in possession of such information, to any recipient of this Information Memorandum;

(c) The Arranger and/or their affiliates may, now and in the future, have fiduciary or other

relationships under which it, or they, may exercise voting power over securities of various persons. Those securities may, from time to time, include securities of the Issuer;

(d) The Arranger and/or their affiliates may exercise such voting powers, and otherwise perform

its functions in connection with such fiduciary or other relationships, without regard to its relationship to the Issuer and/or the securities;

(e) The Arranger is not acting as trustee or fiduciary for the investors or any other person; and (f) The Arranger is under no obligation to conduct any "know your customer" or other procedures

in relation to any person. NOTHING IN THIS INFORMATION MEMORANDUM CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE SUCH OFFER OR PLACEMENT WOULD BE IN VIOLATION OF ANY LAW, RULE OR REGULATION. NO ACTION IS BEING TAKEN TO PERMIT AN OFFERING OF THE BONDS IN THE NATURE OF DEBENTURES OR THE DISTRIBUTION OF THIS INFORMATION MEMORANDUM IN ANY JURISDICTION WHERE SUCH ACTION IS REQUIRED. THE DISTRIBUTION/TAKING/SENDING/DISPATCHING/TRANSMITTING OF THIS INFORMATION MEMORANDUM AND THE OFFERING AND SALE OF THE BONDS

4

MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. 5. DISCLAIMER OF THE STOCK EXCHANGE As required, a copy of this Series-I IM shall be submitted to BSE Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Series-I IM with BSE or hosting the same on its website should not in any way be deemed or construed that the Series-I IM has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Series-I IM; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

5

II. DEFINITIONS/ ABBREVIATIONS

AY Assessment Year

Allotment/ Allot/ Allotted

The issue and allotment of the Bonds to the successful Applicant(s) in the Issue

Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part

Applicant/Investor A person who makes an offer to subscribe the Bonds pursuant to the terms of this Series-I IM and the Application Form

Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Bonds and which will be considered as the application for allotment of Bonds in the Issue

Bondholder(s) Any person holding Bonds and whose name appears on the beneficial owners list provided by the Depositories

Beneficial Owner(s) Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996)

Members of the Board

The Members of the Board of National Highways Authority of India or Committee thereof

BSE/ Designated Stock Exchange

BSE Limited, being the stock exchange in which Bonds of the Issuer are proposed to be listed

Record Date Reference date for payment of interest/ repayment of principal

CAR Capital Adequacy Ratio

CAG Comptroller and Auditor General of India

ICRA ICRA Limited

IRRPL India Ratings and Research Private Limited

CDSL Central Depository Services (India) Limited

CCEA Cabinet Committee on Economic Affairs

CRISIL CRISIL Limited

CARE CARE Ratings Limited

Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository Participant

A Depository participant as defined under Depositories Act

DP Depository Participant

DRR Bond/ Debenture Redemption Reserve

EPS Earnings Per Share

FIs Financial Institutions

FIIs/ FPIs Foreign Institutional Investors / Foreign Portfolio Investors

Financial Year/ FY Period of twelve months ending March 31, of that particular year

GoI/ GOI Government of India/ Central Government

Trustees Trustees for the Bondholders in this case being IDBI Trusteeship Limited

Issuer/ NHAI/Authority

National Highways Authority of India, an autonomous body under the Ministry of Road Transport & Highways, Government of India, constituted by an act of Parliament - The National Highways Authority of India Act, 1988 and having its

6

head office at G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075

I.T. Act The Income Tax Act, 1961, as amended from time to time

Km kilo meter

MF Mutual Fund

MoF Ministry of Finance

NECS National Electronic Clearing Service

NEFT National Electronic Funds Transfer

NSDL National Securities Depository Limited

NHDP National Highways Development Programme

PAN Permanent Account Number

GIR General Index Registration Number

Rs./ INR Indian National Rupee

RBI Reserve Bank of India

RTGS Real Time Gross Settlement

Registrar Registrar to the Issue, in this case being Bigshare Services Private Limited

SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

SEBI Debt Regulations

Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended from time to time.

TDS Tax Deducted at Source under provisions of the I.T. Act

Series-I IM This Information Memorandum dated April 27, 2020 containing necessary terms and conditions of the specific issue and other necessary disclosure

The Act The National Highways Authority of India Act, 1988 (“NHAI Act”)

7

III. ISSUER INFORMATION Name of the Issuer : National Highways Authority of India Head Office : G - 5 & 6, Sector - 10, Dwarka, New Delhi - 110075

Tel. : (011)25074100, 25074200

Fax : +91-11-25093507

Website : www.nhai.gov.in

E-mail : [email protected]

Compliance Officer* for : Mr. S. Q. Ahmad the Issue General Manager (Finance)

National Highways Authority of India Head Office G – 5&6, Sector 10, Dwarka, New Delhi - 110075 Tel: +91 11 25074100, 25074200 E-mail: [email protected]

* The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account etc. Chief Financial Officer : Mr. Asheesh Sharma, IAS of the Issuer* Member (Finance)

National Highways Authority of India Head Office G – 5&6, Sector 10, Dwarka, New Delhi - 110075 Tel.: +91 11 25074100, 25074200

Fax: +91 1125093542 E-mail: [email protected]

* The Issuer does not have a designated Chief Financial Officer. The finance function is headed byMr. Asheesh Sharma, IAS,who is the Member (Finance) of the Issuer, whose particulars are given above.

Arrangers/QiBs/Investors to the Issue:

Sr. No.

Particulars Amount (In Rs. Crore)

1. STATE BANK OF INDIA 600

2. AXIS BANK LIMITED 365

3. CMPFO PROVIDENT FUND-SBI FMP 190

4. HDFC BANK LIMITED 150

5. PNB GILTS LIMITED 100

6. BANK OF INDIA 50

7. COAL MINES PROVIDENT FUND ORGANISATION 50

8. NPS TRUST AC UTI RETIREMENT SOLUTIONS PENSION FUND SCHEME CENTRAL GOVT

50

9. YES BANK 50

10. NTPC LTD EMPLOYEES PROVIDENT FUND TRUST 40

11. ICICI BANK 35

12. A. K. CAPITAL SERVICES LIMITED 25

13. ICICI SECURITIES PRIMARY DEALERSHIP LIMITED 25

14. PRAMERICA LIFE INSURANCE LIMITED 25

15. PUNJAB NATIONAL BANK 25

16. TRUST INVESTMENT ADVISORS PRIVATE LIMITED 25


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17. Others 19

Total : 1,824

Trustees for the Bondholders: IDBI Trusteeship Services Limited

Asian Building, Ground Floor 17. R. Kamani Marg Ballard Estate Mumbai Maharashtra – 400 001 India Phone: 022 40807000 Fax: 022 66311776 Email: [email protected]

Registrar to the Issue: BEETAL FINANCIAL & COMPUTER SERVICES

99, Beetal House, Madangir, Behind Local Shopping Centre Near Harsukhdas Mandir New Delhi – 110062 Tel: +91 11 2996 1281 - 83 Fax:+91 11 2996 1284 E-mail: [email protected]

Credit Rating : India Ratings & Research Private Limited

Agencies A Fitch Group Company Wockhardt Tower, Level 4, West Wing BandraKurla Complex, Bandra (E) Mumbai – 400051 Tel:+91 2240001700 Fax:+91 22 40001701 E-mail: [email protected] Website: www.indiaratings.co.in CARE Ratings Limited 13th floor, E-1 Videocon Towers, Jhandewala extansion , New Delhi 110055 Tel:+91 11 45333201 Fax:+91 1145333238 E-mail: [email protected] Website: www.careratings.com CRISIL Limited Registered Office CRISIL House, Central Avenue Hiranandani Business Park Powai, Mumbai – 400 076 Tel.:+91 22 33423000 Fax:+91 2233423050 E-mail:[email protected] Website: www.crisil.com



http://www.indiaratings/

mailto:jatin.babbar@careratings

http://www.careratings/

mailto:rohit.chugh@crisilrating

http://www.crisil.com/

9

ICRA Limited Electric Mansion, 3rd Floor, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025 Tel.: +91 2261143406; Fax: +91 2224331390 E-mail: [email protected] Website: www.icra.in;

Stautory Auditors : Comptroller and Auditor General of India Indian Audit & Accounts Department

Office of the Principal Director of Commercial Audit & Ex-Officio Member, Audit Board - 1 3rd Floor, A-Wing, Indraprastha Bhawan New Delhi - 110002 Tel:+91 11 23378473 Fax:+91 1123378432 E-mail:[email protected]

http://www.icra.in/

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IV. DETAILS OF MEMBERS OF THE BOARD OF THE ISSUER MEMBERS OF THE BOARD OF THE ISSUER The Issuer was constituted by the NHAI Act to develop, maintain and manage the national highways vested in or entrusted to it by the Central Government. As per the NHAI Act, the Issuer is managed by Members of the Authority, which consists of:

(i) a Chairman; (ii) not more than six full-time Members; and (iii) not more than six part-time Members. Each Member is appointed by the Central Government by notification in the official gazette. Presently, the Issuer has five full time Members (excluding the Chairman) and four part time Members. Every meeting of the Issuer must be attended by at least two-thirds of total members and three-quarters of the part-time Members. The NHAI Act provides that for the purpose of discharging its functions, the Issuer shall appoint such number of officers and other employees as it may consider necessary. Details of the Chairman and full-time Members of the Authority:

Sl. No. Description

1. Name Dr. Sukhbir Singh Sandu, IAS

Designation Chairman, NHAI

Date of Appointment October 28, 2019

Other Directorships -

Age 57 years

2. Name Shri Alok, IAS

Designation Member (Adminstration

Date of Appointment January 20, 2020

Other Directorships None

Age 54 years

3. Name Shri Asheesh Sharma, IAS

Designation Member (Finance)

Date of Appointment June 5, 2018

Other Directorships Chairman & Managing Director of Indian Highways Management Company Ltd.

Age 49 years

4. Name Shri R. K. Pandey

Designation Member (Project)

Date of Appointment November 04, 2015


Age 56 years

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Details of part-time Members of the Authority:

SI. No. Description

1. Name Shri Sanjeev Ranjan, IAS

Designation Secretary to the Government of India, Department of Road Transport & Highways, Government of India

Date of Appointment April 1, 2019


Age 57 years

2. Name Sh. Amitabh Kant, IAS (Retd)

Designation CEO, NITI Aayog

Date of Appointment November 6, 2017

Other Directorships India International Convention and Exhibition Centre Limited

Age 64 years

3. Name Shri T.V.Somanathan, IAS

Designation Secretary (Expenditure), Ministry of Finance,

Date of Appointment December 28, 2019


Age 55 years

4. Name Shri I.K. Pandey

Designation Director General (RD) & Special Secretary

Date of Appointment February 07, 2019


Age 57 years NONE OF THE CURRENT MEMBERS OF THE ISSUER APPEAR IN THE RBI'S DEFAULTER LIST OR ECGC'S DEFAULT

LIST. Changes to the Members of the Issuer during the last three years The following changes have occurred to the membership of the Issuer in the three years preceding the date of this Prospectus:

Name Date of Appointment

Date of retirement /

relinquishing charge

Dr. Sukhbir Singh Sandhu, IAS October 28, 2019 Continuing as Chairman

Shri Alok, IAS January 20, 2020 Continuing as a Member

Shri Asheesh Sharma, IAS June 5, 2018 Continuing as a Member

Shri R.K. Pandey, IES

Member (Projects) November 04, 2015

Continuing as a Member

Shri Sanjeev Ranjan, IAS

Secretary Road Transport &

Highways, Government of India

April 1, 2019

Continuing as part time member

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Shri Sanjeev Ranjan, IAS

Chairman, National Highways

Authority of India October 5, 2018 March 03, 2019

Shri D. O. Tawade

Member (Technical) 30 August 2016 May 15, 2019

Shri I.K. Pandey, IES

DG (RD) & Special Secretary February 07, 2019 Continuing as part time member

Shri Nagendra Nath Sinha, IAS

Chairman, National Highways

Authority of India March 5, 2019 October 22, 2019

Shri Girish Chandra Murmu, IAS

Secretary, Department of

Expenditure January 31, 2019 -

Shri R. K. Chaturvedi, IAS

Additional Secretary and

Member (Administration) May 18, 2018 April 22, 2019

Shri Amitabh Kant, IAS (Retd.),

CEO, NITI Aayog November 06, 2017 Continuing as part time member

Shri Ajay Narayan Jha, IAS


Expenditure October 31, 2017 -

Shri Bhesha Nand Singh, IES

DG (RD) & Special Secretary July 1, 2018 January 31, 2019

Shri Subhash Chandra Garg, IAS July 2017 November 06, 2017

Shri Manoj Kumar

DG(Road Development) &

Special Secretary March 01, 2017 June 30, 2017

Shri Rajeev Kumar, IAS May 16, 2017 June 27, 2017

Shri Ashok Lavasa, IAS


Expenditure, Minstry of Finance,

Govt. of India

April 30, 2016 October 31, 2017

Sh. Deepak Kumar, IAS

Chairman, NHAI June 27, 2017 May 16, 2018

Shri Shashikanta Das, IAS


Economic Affairs, Ministry of

Finance, Govt. of India

August 31, 2015 February 28, 2017

Shri Sanjay Mitra, IAS

Secretary, MoRTH January 01, 2016 May 24, 2017

Shri Anand Kumar Singh

Member (Project) February 12, 2016 -

Shri Niraj Verma, IAS,

Member (PPP) March 14, 2016 August 23, 2018

Mrs. Veena Ish, IAS

Member (Admin) August 04, 2016 September 07, 2017

Shri Yudhvir Singh Malik, IAS November 28, 2016 March 31, 2019

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Secretary, Road Transport &

Highways, Government of India

Shri Rohit Kumar Singh, IAS

Member (Finance)

December 21, 2016 May 17, 2018

Shri Atanu Chakraborty, IAS


Economic Affairs, Ministry of

Finance, Government of India

July 23, 2019

December 13, 2019

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V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER

1. STATUTORY AUDITOR OF THE ISSUER

Name of Statutory Auditor Address& Contact Details Auditor since

Comptroller and Auditor General of India Indian Audit & Accounts Department, Office of the Principal Director of Commercial Audit & Ex-Officio Member, Audit Board – 1

3rd Floor, A-Wing Indraprastha Bhawan New Delhi - 110002 Tel: (011) 23378473 Fax: (011) 23378432 E-mail: [email protected]

Since establishment as per the National Highways Authority of India Act, 1988

2. CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST THREE YEARS There is no change in the Statutory Auditors of the Issuer during the last three financial years.

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VI. MANAGEMENT PERCEPTION OF RISK FACTORS

RISKS RELATING TO THE ISSUER'S BUSINESS The Issuer is presently involved in a number of civil proceedings, including arbitration, environmental and land acquisition cases. In the event that these cases are decided against the Issuer or if there is a failure by the Issuer to adequately recover its claims against the other parties it may have an adverse effect on the Issuer's operations. The Issuer is a party to various legal proceedings and claims relating to its business and operations in India. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. These legal proceedings include civil suits, arbitration claims, environmental proceedings and proceedings involving the acquisition of land for its operations. No assurance can be given that these legal proceedings will be decided in the Issuer’s favour. Any adverse decision in these proceedings may have a significant adverse effect on the Issuer’s business and results of operations. There is also no assurance that similar proceedings will not be initiated against the Issuer in the future. Further, should any new developments arise, such as a change in Indian law or rulings against the Issuer by appellate courts or tribunals, the Issuer may face an increase in the costs of construction which could in turn increase the Issuer's expenditure. The Issuer may need to make provisions in its financial statements, to reflect its increased expenses and liabilities. Additionally, the Central Government has made a direction to all concerned entities, including the Issuer, that in relation to arbitration proceedings where the Issuer is challenging the arbitral awards, it should make a payment of up to 75 per cent. of the amount claimed against a bank guarantee pending final adjudication of the appeal proceedings. The Issuer started accepting claims under this scheme on December 2016, the further implementation of this scheme may affect the Issuer's financial condition and limit its ability to allocate its financial resources towards the implementation of its projects. The Issuer's operations are significantly dependent on the funding received from the Central Government and any delay or decrease in the funding plan by the Central Government or any Government entities may adversely affect the Issuer's operations. The Issuer's operations are very capital intensive and any reduction in the budgetary allocation of capital, funding or grants by the Central Government may materially affect the Issuer's performance and operations. As the Issuer's growth plans are mainly determined by the amount of Central Government’s support in the form of budgetary allocations, any adverse developments in the policy of the Central Government in the manner in which it seeks to address the development of the infrastructure needs of India will have a material and adverse effect on the Issuer's business. If funding from the Central Government reduces or if there is any adverse change in the pattern of allocation of the cess collected by the Central Government or if there is a downturn in the macroeconomic environment in India or in sectors which are directly dependent on the road infrastructure, the results of the Issuer's operations and future performance could be materially and adversely affected. The Issuer's operations are dependent on the policies of the Central Government and the State Governments and the initiatives implemented by them to develop the road infrastructure in India. Any lack of support or any delay in the implementation of regulatory initiatives will adversely affect the Issuer's operations. The Issuer believes that the development of India's infrastructure is dependent on the formulation and effective implementation of State Government and Central Government’s programs and policies that facilitate and encourage private sector investment in the infrastructure sectors in India. Many of these programs and policies are evolving and their successful implementation may depend on whether they are properly designed to address the infrastructure development needs in India. Additionally, these programs will need continued support from stable and experienced regulatory regimes that not only

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encourage the continued movement of private capital into infrastructure development but also lead to increased competition, appropriate allocation of risk, transparency, effective dispute resolution and more efficient and cost-effective services to the end-consumer. Additionally, policies of the Central Government and State Governments which mandate development in certain specific sectors, or areas, including but not limited to rural, coastal and/or border areas may not be economically remunerative. In the event that State Government and Central Government's initiatives and regulations in the infrastructure industry do not proceed or progress in the anticipated manner, the results of the Issuer's operations could be materially affected. Further, for a successful implementation of a project, an efficient process for the acquisition of land is necessary. Whilst a modified land acquisition policy is presently being formulated by the Central Government in conjunction with the State Governments, it is yet to be finalised. Any delay in the acquisition of land will lead to delays in the implementation of the relevant projects which could materially affect the Issuer's operation and growth. The Issuer's operations may also be affected by an increase in the prices of raw materials or shortages of raw materials which may lead to an increase in the cost of construction of road projects. Any increase in the prices of raw materials or a shortage of raw materials necessary for a project may affect the financial viability of a project or cause delays in the implementation of a project. Additionally, some engineering, procurement and construction ("EPC") contracts may contain provisions where the payment made to the contractor will need to be adjusted to the wholesale prices index or the consumer prices index in India. These adjustments may lead to further increases in the construction cost for the projects. The Issuer's operations are dependent on forecasting traffic volumes. In some of the Issuer's projects, the user fee generated from highway stretches tolled by the Issuer is remitted to the Central Government and is received back by the Issuer from the Central Government. Any material decrease between the actual traffic volume and the forecasted traffic volume on account of any unforeseen circumstances like COVID-19 or due to inaccurate forecasting or (any other reason which may cause a difference between actual traffic volume and forecasts) may therefore have a material adverse effect on the Issuer's capital flows and performance. During Fiscal 2018, the Issuer deposited an amount of INR 88.40 billion including toll revenue received by the Issuer from roads operated by it to the Consolidated Fund of India ("Consolidated Fund of

India"). This amount excludes any amounts raised by concessionaires under the Issuer's public private partnership ("PPP") projects. Toll revenues depend on toll receipts and are affected by changes in traffic volumes. Factors that affect traffic volumes include:

i) toll rates; ii) fuel prices in India; iii) the affordability of automobiles; iv) the quality, convenience and travel time on alternate routes outside the Issuer's network; v) the availability of alternative means of transportation, including rail networks and air

transport; vi) the level of commercial, industrial and residential development in areas served by the Issuer's

projects; vii) growth of the Indian economy; viii) adverse weather conditions; and ix) seasonal holidays.

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Revenue from toll receipts is affected by traffic volume and tariff rates, both of which are beyond the Issuer's control. The user fee structure is laid down under National Highways (Rate of Fee) Rules, 1997 and National Highways Fee (Determination of Rates and Collection) Rules, 2008 as amended and is uniformly applicable. Reduced growth of traffic on account of an economic slowdown, restrictions on mining, a decline in manufacturing and/or exports may decrease the Issuer's toll revenues. Further, any change in the applicable toll policies or other applicable laws which affects the category of vehicle or fuel, may lead to an increase or a decrease in the toll revenue and may affect the Issuer's capital inflows thereby affecting the Issuer's results. In the event of significant decrease in traffic volumes on such stretches of the road network, the Issuer may experience a corresponding decrease in the capital which the Issuer receives from the Central Government, which may reduce its future execution capabilities. Leakage of traffic and toll collection on roads operated by the Issuer may affect the volume of collections and inflows which may in turn affect the capital which the Issuer receives from the Central Government and the Issuer's future project execution capabilities. The success of toll road projects is dependent on the toll rates that are levied from the users. Any material decrease between the actual traffic volume and forecast traffic volume, or increase between the actual operation and maintenance expenses for such roads will lead to a decrease in toll receipts. Toll receipts are also primarily dependent on the integrity of toll collection systems. The revenues derived from the collection of tolls may be reduced by leakage through toll evasion, fraud, theft or technical faults in toll collection systems. If toll collection is not adequately monitored, leakage may reduce toll revenue. Although the Issuer has systems in place to minimise leakage through fraud and theft, any significant failure by the Issuer to control leakage in toll collection could have a material adverse effect on the Issuer's operations and prospects. Further, there may be situations where toll collection is disrupted or stopped due to public disturbances which may result in reduced revenue collection by the relevant concessionaires or contractors or by the Issuer. Any such disruption or stoppage of toll collection may adversely affect revenue collections. Fluctuations in interest rates and exchange rates on the Issuer's external borrowings may adversely affect its operations. As of September 30, 2019, the Issuer has outstanding multilateral external borrowings of Rs. 59,702.00 lakh from the ADB. The final instalment of such borrowings is payable on 1 July 2025. Because this loan is not hedged for repayment of principal and interest and repayment of principal and interest is made in foreign currency, any increase in the interest rates and/or any adverse fluctuation in the exchange rates may increase the cost of the Issuer's borrowings, thereby increasing the cost of the relevant projects. The Issuer may raise further borrowings for funding various projects under the NHDP and other related programmes. Any increase in domestic and/or international interest rates may have adverse impact on the Issuer's cost of borrowings and projects. The Issuer's financial condition and physical performance could be materially affected if the Issuer does not complete its projects as planned or if its projects experience delay.

The Issuer has experienced time and cost overruns in the past. There may be a delay in implementation or completion of projects or a change of scope of work, due to factors such as delays or failures to obtain necessary permits, or authorisations which are beyond the Issuer's control or the control of the relevant contractors or concessionaires. Delays in the completion of a project may also lead to cost overruns. Such delays in the completion of projects may delay the commencement of the Issuer's toll collections thereby affecting its operations and physical performance.

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Any delay in the completion of the projects may also trigger the delay mechanism in the underlying contracts and adverse consequences under the relevant contracts could follow. The Issuer's operations and financials may be adversely affected due to any delay in completion of the relevant projects and resulting in an increase in the costs for the relevant concessionaires or contractors and in some situations delaying the accrual of revenue to the Issuer. A change in Central Government’s equity stake in the Issuer or a change in the administrative structure of the Issuer may adversely affect its operations. The Issuer is an Authority constituted by a Special Act i.e. NHAI Act and it is wholly owned, controlled and administered by the Ministry of Road Transport and Highways, Government of India. 100 per cent of the Issuer’s equity is funded by the Government of India. Any change in the Government’s shareholdings or any change in the structure of the Issuer could materially adversely affect the financial status and performance of the Issuer. The Central Government can, pursuant to the powers vested in it under Section 32 of the NHAI Act supersede the Issuer. If, at any time, the Central Government is of the opinion that (i) on account of a grave emergency, the Issuer is unable to discharge the functions and duties imposed on it by or under the provisions of the NHAI Act; (ii) the Issuer has persistently defaulted in complying with any direction issued by the Central Government under the NHAI Act; (iii) in the discharge of the functions and duties imposed on it by or under the provisions of the NHAI Act; or (iv) circumstances exist which render it necessary in the public interest to do so, the Central Government may supersede the Issuer. Should the Central Government therefore exercise its power to supersede the Issuer pursuant to the power vested in it under the NHAI Act, the Issuer may not be able to carry out its business impacting its financial condition or may not be able to carry out its obligations under the Notes. The Issuer's operations may also be adversely affected if it is unable to manage its business as it grows. The Issuer's business operations may be affected by shortcomings and failures in the Issuer's internal processes and systems. The Issuer's business is highly dependent on its ability to process and monitor a large number of projects. As the Issuer develops its business, the inability of its systems to accommodate an increasing volume of projects could also constrain its ability to expand its businesses. Additionally, shortcomings or failures in the Issuer's internal processes or systems could lead to an impairment of its financial condition, financial loss, disruption of its business and reputational damage. Any inability of the Issuer to successfully scale up its resources will adversely affect its business and results of operations. The Issuer's ability to operate will depend in part on its ability to maintain and upgrade its contract management systems and policies on a timely and cost-effective basis. The information made available to the Issuer's management through its existing systems may not be timely and sufficient to manage risks or to plan for and respond to changes in market conditions and other developments in the Issuer's operations. The Issuer may experience difficulties in upgrading, developing and expanding its systems quickly enough to accommodate its growing requirements. The Issuer's failure to maintain or improve or upgrade its management information systems in a timely manner could materially and adversely affect its operations. The Issuer may also be subject to disruptions of its operating systems, arising from events that are wholly or partially beyond the Issuer's control, including but not limited to, computer viruses or electrical or telecommunication service disruptions, which may result in a loss or liability to it.

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The Comptroller and Auditor General of India ("CAG") has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer. In its audit report for Fiscal 2015 and Fiscal 2014, the CAG has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer. The CAG has observed that the Issuer, inter alia, has not followed the applicable accounting policies and has not maintained proper records in respect of the utilisation of project based borrowed funds. In their audit report for Fiscal 2014, the CAG noted, inter alia, that (i) the Issuer did not maintain records in respect of the utilisation of project-based borrowed funds and the total borrowed costs allocated to completed and incomplete projects could not be verified; (ii) the allocation of “net establishment expenses for the year” to completed projects was against generally accepted accounting principles; (iii) adjustments had not been made in the accounts for 16 road projects passed to concessionaires for upgrade and five other road projects transferred to State Governments; and (iv) depreciation had not been accounted for in stretches of highways of completed projects, leading to an overstatement of assets. The CAG also noted in their audit report for Fiscal 2015 that due to books of the Issuer not being maintained in a proper manner, there has been an overstatement of its fixed assets capital work in progress. In some instances the CAG was also not able to verify the capital work in progress due to the absence of project-based details of expenditure on ongoing as well as completed projects. The CAG has in their audit report for Fiscal 2015 and Fiscal 2014 stated that they are not able to provide an audit opinion as to whether the financial statements of the Issuer for these periods give a true and fair view in accordance with the generally accepted accounting principles in India. In its audit report for Fiscal 2016, the CAG has provided an audit opinion that the Issuer's balance sheet and profit and loss account give a true and fair view in conformity with the generally accepted accounting principles of India. However, the CAG has made a number of observations. The observations from the CAG include, inter alia, statements that (i) the Issuer has not maintained proper books of accounts and other relevant records; and (ii) certain statements made by the Issuer in the offering documents relating to the Tax Free Bonds (as defined below) were not complied with. The audit report for Fiscal 2016 also includes other observations from the CAG which includes (i) non-adherence by the Issuer to certain NHAI Rules; (ii) the need for the internal control systems of the Issuer to be strengthened; and (iii) that are some instances in which the Issuer has not taken corrective action following observations or comments in their past audit reports. The audit report for Fiscal 2017 also includes other observations from the CAG which includes (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government. The audit report for Fiscal 2018 also includes other observations from the CAG which includes (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government. Although the Issuer believes that it has complied with the undertakings provided by it in the issue documents of the Tax Free Bonds, the CAG in its audit report has remarked that that the Issuer has not complied with certain undertakings. In the event that the Issuer is determined by the trustee or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation. The Issuer has issued the Tax Free Bonds and had provided certain undertakings in the issue documents for the Tax Free Bonds stating that (i) all proceeds received out of each tranche issue of the

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bonds to the public shall be transferred to a separate bank account; (ii) details of all proceeds utilised out of each tranche shall be disclosed under an appropriate separate heading in its balance sheet indicating the purpose for which such proceeds were utilised; and (iii) details of all unutilised proceeds from each tranche issue, if any, shall be disclosed under an appropriate separate head in its balance sheet indicating the form in which such unutilised proceeds have been invested. Under the terms of the Tax Free Bonds, it is an event of default if inter alia, any information provided by the Issuer in its issue documents and any other information furnished, and the warranties given or deemed to be given by the Issuer to bondholders or beneficial owners relating to the issue of the Tax Free Bonds is found to be misleading or incorrect in any material respect or any warranty is found to be incorrect. The Issuer believes that it has complied with the undertaking to transfer proceeds from the offerings of the Tax Free Bonds to a separate bank account by crediting the issue proceeds to an escrow account established under the terms of the respective escrow agreements. The proceeds were further transferred to the NHAI Fund upon receipt of written notice from the Issuer and the managers to the issue confirming execution of the respective security documents under the Tax Free Bonds. The details of the respective escrow agreements along with details of transfer of proceeds is as provided below:

1. For 2011 Tax Free Bonds:

Escrow agreement dated 15 December 2011 entered into between the Issuer, SBI Capital Markets Limited, A. K. Capital Services Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, MCS Limited and State Bank of India, Axis Bank Limited, ICICI Bank Limited, Syndicate Bank Limited, Union Bank of India and HDFC Bank Limited.

Escrow bank Escrow account number(s)

Date of credit into escrow account

Amount credited in INR

Date of transfer to the NHAI Fund

Axis Bank (i) 911020066736591 (ii) 911020066736748 (iii) 911020066736832

28 December 2011 to 5 January 2012

31,150,852,000 7 February 2012

HDFC Bank (i) 00030350015081 (ii) 00030350015106 (iii) 00030350015098


16,674,435,000 7 February 2012

ICICI Bank (i) 000405100352 (ii) 000405100353 (iii) 000405100354


46,761,066,000 7 February 2012

State Bank of India

(i) 32107995792 (ii) 32107996525 (iii) 32107997132


4,036,184,000 7 February 2012

Syndicate Bank (i) 90623170000046 (ii) 90623170000050 (iii) 90623170000065


618,040,000 7 February 2012

Union Bank (i) 536401010000585 (ii) 536401010000583 (iii) 536401010000584


759,423,000 7 February 2012


Escrow agreement dated 9 January 2014 entered into between the Issuer, Edelweiss Financial Services Limited, A.K Capital Services Limited, Axis Capital Limited, ICICI Securities Limited, Axis Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IndusInd Bank Limited, IDBI Bank Limited, Syndicate Bank Limited and Karvy Computershare Private Limited.

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IndusInd Bank (i) 200999371420 (ii) 200999371437

15 January 2014 to 27 January 2014

27,381,777,000 12 February 2014

Axis Bank (i) 914020001457427 (ii) 914020001457621


4,441,969,000 12 February 2014

HDFC Bank (i) 00030350018544 (ii) 00030350018554


3,288,555,000 12 February 2014

IDBI Bank (i) 0127103000014234 (ii) 0127103000014243


80,262,000 12 February 2014

ICICI Bank (i) 000405104456 (ii) 000405104457


1,791,437,000 12 February 2014


Escrow agreement dated 20 October 2015 entered into between the Issuer, A.K. Capital Services Limited, SBI Capital Markets Limited, Axis Capital Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IndusInd Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IDBI Bank Limited, Axis Bank Limited, State Bank of India, Syndicate Bank Limited and Karvy Computershare Private Limited.

(a) 2016 Tax Free Bonds issued through tranche Offering Circular dated 11 December 2015





Axis Bank (i) 915020056420736 (ii) 915020056421373

17 December 2015 to 31 December 2015

5,890,467,000 14 January 2016

HDFC Bank (i) 00030350022021 (ii) 00030350022031

17 December2015 to 31 December 2015

20,813,071,000 14 January 2016

IDBI Bank (i) 0011103000013545 (ii) 0011103000013554


213,753,000 14 January 2016

ICICI Bank (i) 000405110068 (ii) 000405110067


21,456,244,000 14 January 2016

IndusInd Bank (Including ASBA)

(i) 201000264609 (ii) 201000264618


43,368,435,000 14 January 2016

State Bank of India

(i) 35344311018 (ii) 35344314756


8,255,330,000 14 January 2016

Syndicate Bank (i) 90623170000104 (ii) 90623170000119


2,700,000 14 January 2016

(b) 2016 Tax Free Bonds issued through tranche Offering Circular dated 22 February 2016

Escrow bank Escrow account

number(s) Date of credit into

escrow account Amount

credited in INR


Axis Bank (i) 915020056420736 (ii) 915020056421373

24 February 2016 to 26 February 2016

453,814,000 11 March 2016

HDFC Bank (i) 00030350022021 (ii) 00030350022031


1,395,731,000 11 March 2016

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IDBI Bank (i) 0011103000013545 (ii) 0011103000013554


73,908,000 11 March 2016

ICICI Bank (i) 00405110068 (ii) 000405110067


3,141,349,000 11 March 2016

IndusInd Bank (Including ASBA)

(i) 201000264609 (ii) 201000264618


22,541,132,000 11 March 2016

State Bank of India

(i) 35344311018 (ii) 35344314756


5,391,056,000 11 March 2016

Syndicate Bank (i) 90623170000104 (ii) 90623170000119


3,010,000 11 March 2016

However, the CAG's observations in its audit reports for Fiscals 2013, 2014, 2015 and 2016 were that the Issuer has not complied with the above undertaking as no separate accounts were maintained by the Issuer for the Tax Free Bonds. The Issuer, in its management reply has provided responses to each of the remarks of the CAG. The Issuer believes that it has complied with the undertakings to provide details under an appropriate head in its balance sheet disclosing (a) the purpose for which the proceeds from the Tax Free Bonds have been utilised and (b) the details of investment of the unutilised proceeds from the Tax Free Bonds. Further, the proceeds from the Tax Free Bonds have been utilised for financing various projects implemented by the Issuer. This is in accordance with the objects of the issue provided under the issue documents for the Tax Free Bonds and therefore the requirement to disclose the use separately is satisfied as the utilisation of proceeds from the Tax Free Bonds have been disclosed as part of the capital work in progress in the balance sheet of the Issuer. Further, the Issuer believes that it has complied with the undertaking in relation to it providing the details of investment of the unutilised proceeds from each of the Tax Free Bonds in its financial statements by disclosing such investments as part of balances with scheduled banks in its balance sheet. Therefore, the Issuer is of the opinion that it has duly complied with the undertakings provided by it under the Tax Free Bonds notwithstanding adverse remarks of the CAG. In the event that the Issuer is determined by the relevant trustees under the Tax Free Bonds or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation. Such adverse material effect may include but is not limited to default, cross-default, acceleration and/or enforcement of the Tax Free Bonds and litigation and/or other disputes. As described above, any determination by the trustee under the relevant issue documents relating to the Tax Free Bonds that the Issuer had not complied with the terms of the Tax Free Bonds (as reported by the CAG) may result in an event of default being called by the trustee. If the trustee gives a notice of occurrence of an event of default, it may not be possible for the Issuer to cure such a breach which will result in an event of default occurring and may have a material adverse impact on the financial condition and reputation of the Issuer. Further, in the audit reports for the year Fiscals 2014 and 2015, the CAG has also remarked that the response to the CAG’s remarks provided in the notes to accounts of the financial statements of the Issuer were inadequate. The CAG further remarked that the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") provide that if an auditor, in his audit report, in respect of the financial results of any previous financial year has any remarks, the listed entity, in its notes to accounts, should provide how the reservation has been resolved or if the same has not been resolved, the reason thereof and the steps which the listed entity intends to take in the matter. As the Issuer had not included a statement satisfying the above, the CAG has remarked that the disclosures in the notes to accounts of the financial statements of the Issuer are inadequate and violates the Listing Regulations. The audit report for the Fiscal 2016, however, does not contain an adverse remark from the CAG in connection with the violation of the Listing Regulations

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by the Issuer, as the Issuer believes that its responses to the CAG (in relation to the audit report for Fiscal 2015) in relation to its compliance with the Listing Regulations was found to be satisfactory by the CAG. The audit report for Fiscal year 2017 includes the following observations from the CAG (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government. The Listing Regulations provide that an entity which is in violation is liable to a penalty of INR 100,000 for each day during which such failure continues or INR 10,000,000 whichever is less. As of the date of this Offering Circular, no such penalty has been imposed on the Issuer for violating the Listing Regulations. For the purposes of the above paragraphs of this risk factor: 2011 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 13 December 2011 and tranche Offering Circular dated 22 December 2011. 2014 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular and tranche Offering Circular, each dated 9 January 2014.

2016 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 11 December 2015, tranche Offering Circular dated 11 December 2015 and 22 February 2016.

Tax Free Bonds means collectively, the 2011 Tax Free Bonds, the 2014 Tax Free Bonds and the 2016 Tax Free Bonds. The Issuer has certain contingent liabilities that may adversely affect its financial condition. The Issuer has contingent liabilities, which may affect its financial condition. As at 31 March 2018, there were 1014 arbitration cases and 730 court cases involving Rs. 55,34,497.00 lakh and USD 4.30 lakh in Arbitration and Rs. 7,43,905.00 lakh and Euros 2.62 lakh in Court cases pending against the Issuer. Further, Issuer has also arranged bank guarantee to the tune of Rs. 7,051.00 lakh and fixed deposits of Rs.90,749.00 lakh as per various court orders. Issuer has issued letters of credits to the tune of Rs. 61,948.00 lakh for payment of annuities. The contingent liabilities consist primarily of liabilities on account of legal disputes, bank guarantees, letters of credit etc. Further, the contingent liability of Issuer in respect of total project cost pertaining to EPC, consultancy and O&M contracts under implementation is Rs. 63,99,707.00 lakh, Rs. 4,03,886.00 lakh and Rs. 43,673.00 lakh respectively. These contingent liabilities, if determined against us in the future, may impact our business and the results of operations. The Issuer is exposed to the risks associated with the non-performance of underlying assets/projects of certain SPVs). The issuer has taken up development of port connectivity projects and expressways by setting up Special Purpose Vehicles (SPVs) where the Issuer contributes toward a portion of the project cost by way of an equity participation or through loans and advances. Some of these SPVs also have an equity participation by port trusts, State Government or their representative entities. The SPVs also raise loans for financing the projects. The SPVs are authorised to collect user fees on the developed stretches to cover repayment of debts and for meeting the costs of operations and maintenance. The Issuer formed 11 project specific SPVs, out of which 1 SPV has been wound up as per the order of NCLT dated 21.05.2019 and 1 associate company. Each SPV has been formed with the specific purpose of raising funds and the development of a project. The Issuer has shareholdings which range from 37

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per cent to 100 per cent. in the various SPVs. The Issuer's equity participation is exposed to the risk of non-performance of the SPV's assets and the business decisions of the other members of the SPV's board which represent other entities such as the Central Government or State Government and in some cases, certain port trusts. Some SPVs have incurred losses during the last three Fiscals. Some of the SPVs have incurred losses during the last three Fiscals, as set out below:

(INR in lakh)

S. No. Name of SPV Fiscal 2019 Fiscal 2018 Fiscal 2017

1. Calcutta Haldia Port Road Company Limited (2,732.23) (882.89) (2,106.85)

2. Cochin Port Road Company Limited (2,096.35) (1,805.42) (2,252.02)

3. New Mangalore Port Road Company Limited (1,249.30) (231.29) (1,717.46)

4. Paradip Port Road Company Limited (3,713.62) (7,012.03) (4,750.99)

5. Tuticorin Port Road Company Limited (229.89) (1,079.49) (1,881.46)

6. Ahmedabad Vadodra Expressway Company

Limited 109.78 (3.78) 225.72

7. Chennai Ennore Port Road Company Limited (0.66) 0.77 84.28

8. Mormugao Port Road Company Limited 1.22 (8.04) -

9. Moradabad Toll Road Company Limited* -** (2.38) 4.55

Note: * Company has been wound up as per order of Hon’ble NCLT dated 21.05.2019. RoC records have not yet been updated on the date of this Information Memorandum. ** Financial statements for the FY 2018-19 have not been audited as the same has been wound-up. There can be no assurance that the SPVs will achieve or sustain profitability in the future. Any losses incurred by these SPVs may have an effect on the successful execution of the Issuer's projects, its business and results of operations. The auditors for some of the SPVs have provided qualified opinions in relation to their audit reports for Fiscal 2015 and Fiscal 2016. The auditors for the above SPVs have provided qualified opinions in relation to certain SPVs. Accounts for the half year ended September 30, 2019 for the Issuer have have not been audited. Audited performance may be materially different from the present results. The accounts of the Issuer and the SPVs are audited annually by the CAG and the auditors appointed by the CAG respectively and they are not subject to any interim audit. Accounts for the half year ended September 30, 2019 have been prepared by the Issuer and are reviewed by S.K. Mehat & Co. (the "Auditors"). The Auditors have reviewed the unaudited standalone financial performance of the Issuer for the half year ended September 30, 2019 and submitted their Limited Review Report on the financial results for the half year period ending September 30, 2019. However, the actual audited performance may be materially different from the limited review results. The Issuer's projects under development are subject to construction, financing and operational risks. Some of the internal processes of the Issuer for the monitoring of its projects and enforcement of its contracts are subject to continuous revision and improvement and are in some instances evolving. At present arrangements for the regular monitoring of projects during both the construction phase and the operations phase are being carried out through regional offices and project implementation units

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of the Issuer. The existing risks include those relating to non-compliance with the conditions in the model concession agreement ("MCA") as well as the following:

(i) construction of the relevant projects as per the specified time schedule and agreed standards; (ii) levy of user charges strictly within the limits specified in the relevant concession agreements; (iii) protection of user interests by ensuring that performance standards, safety and other

requirements are adhered to; (iv) preventing misuse of public assets transferred to the relevant concessionaires; (v) preventing any leakage, diversion or mis-classification of Government revenues; (vi) imposing and recovering penalties for breach of contract; (vii) operating the relevant escrow accounts in accordance with the terms of the relevant concession

agreements; (viii) effective communication and exchange of information for monitoring and enforcement of

obligations; and (ix) supervision of the functioning of the relevant independent engineers with a view to ensuring

that the engineer is discharging all its duties. Thus, any inadequate reporting or monitoring of the Issuer's projects may affect its ability to implement the projects effectively. The Issuer's inability to adhere to its obligations in its project agreements could also have a material adverse effect on the cost of its projects. The Issuer's insurance coverage may not adequately protect it against all losses it incurs in its operations or otherwise. The Issuer maintains or contractually provides for insurance coverage of the type and in the amounts that it believes is adequate for its operations. In addition, not all risks may be insurable on commercially reasonable terms or at all. Although the Issuer believes that it has obtained insurance coverage customary for its business, such insurance may not provide adequate coverage in certain circumstances and is subject to certain deductibles, exclusions and limits on coverage. Therefore, to the extent that the Issuer suffers damage or losses which are not insured, or exceeds its insurance coverage, the loss would have to be borne by the Issuer. There can also be no assurance that the Issuer's claims will be paid, and the proceeds of any insurance claim may also not be sufficient to cover the reinstatement costs as a result of inflation, changes in regulations regarding infrastructure projects, environmental and other factors. The Issuer cannot make any assurances that material losses in excess of insurance proceeds will not occur in the future, potentially having an adverse effect on the Issuer's operations, business and financial conditions. A successful assertion of one or more large claims against the Issuer that exceeds its available insurance coverage or results in changes in its insurance policies, including premium increases or the imposition of a larger deduction or co-insurance requirement, could adversely affect its performance and operations. Further, as an internal policy, the Issuer on some occasions makes pay-outs for the relevant concessionaire's workforce, such as if the concessionaire fails to keep in force all insurances for which it is responsible. The Issuer may, at its option, obtain the insurance policies and/or pay the insurance premium and keep the relevant policy in force. The Issuer does, however, have the option to recover the premium from the relevant concessionaires or contractors. The Issuer may be unable to obtain environmental clearances from competent authorities in a timely manner or at all, and the lack of such permissions could adversely affect its projects. The Issuer's ability to commence its projects depends on it obtaining certain environmental approvals from the relevant governmental authorities. In the event that any such environmental approvals are not received on a timely basis or at all, the commencement of the relevant projects or ongoing construction in such projects will be adversely affected, which may have a material adverse impact on the Issuer's business, financial condition and results of operations.

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The Issuer does not own the premises from which most of its regional offices and project implementation unit offices operate. The Issuer's offices including regional offices and project implementation unit offices are on a lease or a leave and licence basis. The Issuer does not own most of its regional offices, project implementation offices. Any failure on the Issuer's part to execute and/or renew leave and licence agreements and/or lease deeds in connection with such offices or the failure to locate alternative offices in case of termination of the leases and/or leave and license agreements in connection with any branch could adversely affect the ability of the Issuer to efficiently carry out its operations. The Issuer's operations are subject to physical hazards and similar risks that could expose it to material liabilities, reduced inflows and increased execution costs. The Issuer's operations are subject to operational risks as well as project implementation risks. There are hazards inherent in construction projects such as the risk of equipment failure, impact from falling objects, collision, work accidents, fire or explosion and other hazards that may cause injury and loss of life, severe damage to and destruction of property and equipment, and environmental damage. The Issuer also does not have a structured and documented environmental and social management system to address the issues relevant to its sector. Further, the Issuer also assumes liability for defects in connection with any design or engineering work provided by the contractors. Although the Issuer sub-contracts its construction work, it may still be liable for accidents during the construction and operation of its projects. Any of the foregoing factors could have a material adverse effect on the financial condition, reputation and results of the Issuer's operations. There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation. There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation. The allegations against such present and past employees include (i) an employee being involved in allocating land to a third party at a concessional price; (ii) certain employees being involved in irregularities in the construction work on certain national highways; (iii) certain employees being involved in diversion of money allocated for land compensation; (iv) certain employees causing loss to the Issuer as a result of a discrepancy a financial bid not being corrected; and (v) certain employees abusing their official position and favouring a particular construction company. There is a set procedure to deal with such cases by the Investigating Agency or the Commission as the case may be. It may not be possible to get the details of such cases as these may be under investigation by different agencies and may be closed or pending at different stages. The allegations against the Issuer’s employees also involve a bribery incident in connection with a U.S.-based firm, CDM Smith. It is alleged that CDM Smith through its Indian subsidiary, CDM Smith India Private Limited, paid over U.S.$ 1.18 million in bribes to the Issuer’s officials to secure construction contracts between 2011 and 2016. The Central Bureau of Investigation and the Central Vigilance Commission are investigating into this bribery incident. In relation to some of these matters, the Issuer and the relevant authorities have taken actions, including disciplinary actions and/or initiation of criminal proceedings against the individuals concerned. Any loss incurred by such disciplinary actions will be borne by the Issuer. While the Issuer maintains training programmes, codes of conduct and other safeguards designed to prevent the occurrence of every instance of bribery or corruption, it may not be possible for the Issuer to detect or prevent every instance of bribery and corruption by its employees or joint venture partners.

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Incidents such as those described above will affect the Issuer's reputation, its financial condition and its results of operations. There have been adverse media reports in relation to the Issuer, its business, and its employees There have also been various adverse media reports concerning certain present and past employees of the Issuer, oppositions from local communities and other parties to the Issuer's projects and oppositions from special interest groups such as environmental groups relating to the perceived negative impact such activities are having on the local community and the environment. Such adverse media reports can affect the Issuer's reputation, its ability to implement its projects successfully and therefore its financial condition and results of operations. The Issuer's operations could be adversely affected by strikes, work stoppages or increased wage demands by its own or its contractors' work force or any other kind of disputes involving the Issuer's work force. As of 31 March 2018, on an unconsolidated basis, the Issuer had 1079 employees. While the Issuer considers its current labour relations to be good, there can be no assurance that future disruptions in the form of strikes or work stoppages may not be experienced due to disputes or other problems with its work force. Such disruptions may adversely affect its business and results of operations. On many of the Issuer's projects, the Issuer engages external contractors and third parties for construction work and other services in connection with its projects. The number of contract labourers employed by the Issuer varies from time to time based on the nature and extent of work contracted to independent contractors. These third parties include engineers, contractors, suppliers of labour and materials and maintenance service agencies. They may not perform their services in a satisfactory manner and thereby exposing the Issuer to certain risks including delays and an inability to complete its projects in a timely manner. The quality of construction of the projects developed by the Issuer depends on the availability and skills of third parties, which may be adversely affected by strikes and lock-outs. There can be no assurance that skilled contractors and third parties will continue to be available at reasonable rates and in the areas in which the projects are being implemented. As a result, the Issuer may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of contracted services. Any delay in project execution could adversely affect its profitability. Any inability to attract, recruit and retain skilled personnel could adversely affect results of the Issuer's operations. The Issuer is highly dependent on its Members, senior management and other key personnel including skilled project management personnel for managing its business. The Issuer may also face strong competition in recruiting and retaining skilled and professionally qualified staff. Due to the limited pool of skilled personnel in the Issuer's industry, competition for retaining senior management, commercial and finance professionals and engineers in the Issuer's industry is intense. The loss of the services of the Issuer's Members, senior management or other key personnel or the Issuer's inability to recruit or train a sufficient number of experienced personnel or its inability to manage the attrition levels in different employee categories may have an adverse effect on the Issuer's results of operations. Opposition from local communities and other parties may adversely affect the Issuer's operations and financial condition.

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The construction and operation of the Issuer's current and future projects may face opposition from local communities and other parties where these projects are located and from special interest groups such as environmental groups. Such opposition may arise in response to any proposed land acquisition, the intended operations of the Issuer in that particular area and the perceived negative impact such activities may have on the local community and the environment. Any significant opposition by local communities, environmental groups, non-governmental organisations and other parties to the projects of the Issuer may delay project implementation and adversely affect the Issuer's operations and financial condition. The Issuer is subject to risks arising from construction contracts. The risks associated with the Issuer's contractual arrangements are directly linked to the risks of non-performance, default and disputes arising from the underlying construction contracts. The different kinds of contracts which the Issuer manages for its construction activities and the associated risks relate to its PPP projects for which MCAs have been developed, its Operate, Maintain and Transfer (the "OMT") projects and its EPC projects Build, Operate and Toll (BOT) Land acquisition risk: The Issuer is responsible for acquiring land for a project on behalf of MoRTH and the Issuer provides all reasonable support and assistance to the concessionaire in procuring applicable permits required from any government authority. In the event of a delay in procuring the applicable permits, the Issuer may have to compensate the concessionaire which may be in form of an increase in the concession period. Force Majeure Risk: Force majeure covers, among others, the following events which pose a risk to the execution of construction projects:

Non-Political Events

Act of God,

Epidemic,

Extremely adverse weather conditions,

Radioactive contamination,

Ionising radiation,

Fire or explosion;

Strikes or boycotts; and

the discovery of geological conditions, toxic contamination or archaeological remains on the site (together, "Non-Political Events").

Indirect Political Events a. an act of war, invasion, armed conflict or act of foreign enemy, blockade, embargo, riot,

insurrection, terrorist or military action; civil commotion or politically motivated sabotage which prevents collection of tolls and/or fees;

b. industry-wide or state-wide or India-wide strikes or industrial action which prevent collection

of tolls and/or fees; and c. any failure or delay of a contractor to the extent caused by any Indirect Political Event and

which does not result in any offsetting compensation being payable by the concessionaire by or on behalf of such contractor; (together, "Indirect Political Events").

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Political Events

a) change in law affected by any governmental agency, if consequences thereof cannot be dealt

with under and in accordance with the provisions of the relevant concession agreement; b) compulsory acquisition in national interest or expropriation of any project assets or rights of

the concessionaires or of the contractors by any governmental agency; c) unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or grant

without valid cause any consent or approval required by developer; d) any failure or delay of a contractors but only to the extent caused by another Political Event

and which does not result in any offsetting compensation being payable to the concessionaire by or on behalf of such contractor (together, "Political Events").

Issuer Event of Default: In the event of the occurrence of a default specified in the relevant concession agreement which has not been cured within the applicable cure or remedy period as specified in the relevant concession agreement, the Issuer shall be deemed to be in default and the concessionaire shall have the right to terminate the relevant concession agreement. Any default by the Issuer under the concession agreement poses a risk of non-completion of a project or a risk of delay in the completion of a project.

Concessionaire Event of Default: A default by a concessionaire may result in delays to the completion of a project or in the effective management of an already completed project. Termination Payment Liability: The MCA sometimes provides for payment to the project lender(s), in the event of a termination of the concession after the completion of the construction, of an amount equal to the debt due on the date of termination, and thereafter the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway.

Contract Monitoring Risk: Although there are detailed guidelines for the award of contracts to concessionaires, the institutional mechanisms for the monitoring and enforcement of PPP contracts is yet to be implemented. There is a risk that the implementation of PPP projects may not be sufficiently monitored owing to a satisfactory reporting process for monitoring on-site performance of contracts not being in place.

Risk arising from the international competitive bidding process and consultant selection: There is a risk arising from any misstatement or misrepresentation being made by a prospective concessionaire during the bidding process. If the disclosure made by a concessionaire is not true and they do not have the relevant expertise to implement a project, it may negatively affect the successful execution of the relevant project. Insurance liability for the employees of concessionaires in case of default: If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer may be required to keep the insurance policies effective to pay the insurance premium. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments. i) OMT contracts: Under OMT agreements, the Issuer is exposed to the following risks:

a) Under the relevant OMT agreement, the Issuer has to procure the right of way to the site as a

condition precedent within a specified period of time. Any delay in procuring this right of way

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may entitle the concessionaire to claim damages at a specified percentage of the performance security.

b) The Issuer undertakes the risk of maintaining and protecting the construction works during any suspension of the concessionaire.

c) In the event of default or breach of the relevant OMT agreement by the Issuer, its liability is calculated based on all direct costs suffered by the concessionaire as a consequence of such breach. This compensation may also include interest payment on debt.

d) If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer is bound to pay the insurance premium and keep the policies effective. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments.

ii) EPC contracts In addition to the above types of construction contracts, the Issuer has also awarded selected highway projects to private sector participants under EPC contracts. Some of the risks the Issuer may be exposed to under EPC contracts would include the following:

a) Under the relevant EPC contract the Issuer has to procure the right of way to the site as a

condition precedent within a specified period of time. Any delay in procuring this right of way will entitle the relevant contractor to claim damages from the Issuer.

b) Additionally, the Issuer has to ensure that traffic worthiness and safety of the relevant road or highway is maintained. In the case of unforeseen events, such as floods or earthquakes causing excessive deterioration or damage to a particular highway, the Issuer also has to maintain and protect the construction works during the period of suspension of the relevant contractor. Such a liability to maintain may lead to increased works costs.

c) If the relevant contractor fails to keep in force all insurances for which it is responsible, the Issuer, shall be bound to pay the insurance premium and keep the insurance policies effective. The Issuer does, however, have the option to recover the premium from the contractor or to deduct it from subsequent payments.

d) Any dispute arising out of or in relation to the relevant EPC contracts between the parties is a risk for the Issuer. The mechanism for dispute resolution is typically provided in the relevant EPC contracts. Such disputes materially affect project completion and execution and are a major risk.

e) The price quoted by a contractor is to be paid by the Issuer and the Issuer is exposed to the risk of price escalation related to labour or other materials necessary to carry out the project.

f) The Issuer is liable to compensate the relevant contractors for any increase in costs to the contractors due to a change and/or modification in any applicable law.

g) Upon termination of an EPC contract, the Issuer is bound to pay to the contractor a portion of the cost of those works that would not have commenced or have not been completed. Also, on the date of termination or suspension, as the case may be, the maintenance and operation of the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway.

iii) Hybrid Annuity Model:

The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer. The Hybrid Annuity model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction

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period. The project is awarded to the developer quoting the lowest project life cycle cost, where "project life cycle cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent. of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and maintenance risks. Since the Government will bear 40 per cent. of the project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent, upfront funding spread over the 30-36 months of the construction period, and the private participant would be required to bear the balance 60 per cent. of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent. of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of the Hybrid Annuity Model compared with EPC model. Further, the annuity nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion. However, a lot would depend on the Issuer's ability to ensure right of way availability and approvals before awarding these projects.

The inherent risks comprised of in the Hybrid MCA include amongst others:

Force Majeure Risk

Force majeure covers events which pose a risk to the construction projects execution, namely any or all of Non-Political Event(s), Indirect Political Event(s) and Political Event(s) occurring in India as previously discussed under "Build, Operate and Toll - Force Majeure Risk".

Termination Risk

There is also the risk of termination arising from either Political Events or Non-Political Events. The MCA provides for payment to the relevant concessionaires in the case of a termination of the relevant concession agreements and the project highway being transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway. iv) Toll-Operate Transfer (TOT):

Government of India has approved Toll Operate and Transfer (TOT) model under which the Public funded projects operational for two years shall be put to bid wherein the right of collection and

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appropriation of fee shall be assigned for a pre-determined concession period (30 years) to Concessionaires (Developers/Investors) against upfront payment of a lump sum amount to NHAI. Operation and Maintenance (O&M) obligation of such projects shall be with the concessionaire till the completion of the concession period. Projects to be undertaken in the TOT model are to be treated as Public-private-partnership (PPP) projects. The first bundle of TOT projects comprising of 9 project stretches aggregating to a length of 680km has already finalised and Letter of Award (LOA) has been issued. Apart from TOT Bundle-I, NHAI has also identified stretches of approximate length of 1640 kms under TOT in which condition survey and traffic studies is under progress.

The inherent risks comprised of in the TOT MCA include amongst others:

Force Majeure Risk

Force Majeure risk pervades all through the specific provisions in the TOT MCAs and it is a major

source of risk which directly affects the projects of NHAI and affects the output of the organization.

Force Majeure cover the following events which pose a risk to the construction projects execution,

namely any or all of Non-Political Event(s), Indirect Political Event(s) and Political Event(s) occurring

in India which include the following:

Non-Political Events

act of God, epidemic, extremely adverse weather conditions or radioactive contamination or

ionizing radiation, fire or explosion;

strikes or boycotts;

the discovery of geological conditions, toxic contamination or archaeological remains on the Site;

any failure or delay of a Contractor but only to the extent caused by another Non-Political Event

and which does not result in any offsetting compensation being payable to the concessionaire by

or on behalf of such Contractor;

any judgement or order of any court of competent jurisdiction or statutory authority made against

the Concessionaire;

any event or circumstances of a nature analogous to any of the foregoing.

Indirect Political Events

an act of war, invasion, armed conflict or act of foreign enemy, blockade, embargo, riot,

insurrection, terrorist or military action;

civil commotion or politically motivated sabotage which prevents collection of toll/fees;

industry-wide or state-wide or India-wide strikes or industrial action which prevent collection of

toll/fees;

any failure of delay of a contractor to the extent caused by any Indirect Political Event and which

does not result in any offsetting compensation being payable by the concessionaire by or on behalf

of such contractor;

any Indirect Political Event that causes a Non-Political Event; or

any event or circumstances of a nature analogous to any of the foregoing

Political Events

change in Law effected by any governmental agency, only if consequences thereof cannot be dealt

with under and in accordance with the provisions of the concession agreement;

compulsory acquisition, in national interest, or expropriation of any project assets or rights of the

concessionaire or of the contractors by any governmental agency.

unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or grant without

valid cause any consent or approval required by developer.

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any failure or delay of a contractor but only to the extent caused by another Political Event and

which does not result in any offsetting compensation being payable to the concessionaire by or on

behalf of such contractor; or

any event or circumstance of a nature analogous to any of the foregoing.

RISKS RELATING TO INDIA Financial instability in other countries may cause increased volatility in Indian financial markets The Indian market and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Financial turmoil in Asia, Russia, the Middle East and elsewhere in the world in recent years has affected the Indian economy. Although economic conditions are different in each country, investors' reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. Financial disruptions may occur again and could harm the Issuer's business, its future financial performance and the trading price of the Notes. Developments in the Eurozone have exacerbated the on-going global economic crisis. Large budget deficits and rising public debts in Europe triggered sovereign debt finance crises that resulted in the bailouts of some European economies and elevated the risk of government debt defaults, thereby forcing governments to undertake aggressive budget cuts and austerity measures, in turn underscoring the risk of global economic and financial market volatility. Moreover, in 2012, the sovereign ratings of various European Union countries were downgraded. Financial markets and the supply of credit could continue to be negatively impacted by on-going concerns surrounding the sovereign debts and/or fiscal deficits of several countries in Europe, the possibility of further downgrades of, or defaults on, sovereign debt, concerns about a slowdown in growth in certain economies and uncertainties regarding the stability and overall standing of the European Monetary Union. In response to such developments, legislators and financial regulators in the United States, Europe and other jurisdictions, including India, have implemented several policy measures designed to add stability to the financial markets. However, the overall impact of these and other legislative and regulatory efforts on the global financial markets is uncertain, and they may not have the intended stabilising effects. In the event that the current adverse conditions in the global credit markets continue or if there is any significant financial disruption, this could have an adverse effect on the Issuer's business and future financial performance. On 23 June 2016, the United Kingdom held a referendum on its membership of the European Union and voted to leave ("Brexit"). On March 29, 2017 the UK government gave notice (the "Article 50

Notice") to the President of the European Council of its intention to withdraw from the EU pursuant to Article 50 of the Treaty on European Union ("Article 50"). The delivery of the Article 50 Notice triggered the commencement of a negotiation process between the UK and the EU in respect of the arrangements for such withdrawal. Article 50 provides for a two year period for such negotiations to take place. The delivery of the Article 50 Notice introduces significant new uncertainties and instabilities in the financial markets. There is significant uncertainty at this stage as to the impact of Brexit on general economic conditions in the United Kingdom and the European Union and any consequential impact on global financial markets. For example, Brexit could give rise to increased volatility in foreign exchange rate movements and the value of equity and debt investments. A lack of clarity over the

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process for managing the exit and uncertainties surrounding the economic impact could lead to a further slowdown and instability in financial markets. These and other related events have had a significant impact on the global credit and financial markets as a whole, including reduced liquidity, greater volatility, widening of credit spreads and a lack of price transparency in the United States, Europe and global credit and financial markets. In the event that the current adverse conditions in the global credit markets continue or if there are any significant financial disruption, this could have an adverse effect on the Issuer’s business, future financial performance and the trading price of the Notes.

There has been only limited trading in the bonds and it may not be available on sustained basis in the future, and the price of the Bonds may be volatile.

There has been only limited trading in bonds of such nature in the past. Although the Bonds are proposed to be listed on BSE, there can be no assurance that a public market for these Bonds would be available on a sustained basis. The liquidity and market prices of the Bonds can be expected to vary with changes in market and economic conditions, our financial condition and prospects and other factors that generally influence market price of Bonds. Such fluctuations may significantly affect the liquidity and market price of the Bonds, which may trade at a discount to the price at which the Bonds are issued. Further, all extraneous factors which influence the Bond market will affect the present Bonds. The pricing will be subject to factors affecting the general economic condition in India and in the global financial markets. Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability In May 2013, Standard & Poor's, an international rating agency, reiterated its negative outlook on India's credit rating. It identified India's high fiscal deficit and heavy government borrowing as the most significant constraints on its ratings and recommended the implementation of reforms and containment of deficits. In June 2013, Fitch, another international rating agency, returned India's sovereign outlook to "stable" from "negative" a year after its initial downgrade of the outlook, stating that the authorities had been successful in containing the upward pressure on the Central Government budget deficit in the face of a weaker-than-expected economy and that the authorities had also begun to address structural factors that have weakened the investment climate and growth prospects. Similarly, Standard & Poor's upgraded its outlook on India's sovereign debt rating to "stable" in September 2014 and reaffirmed such rating in November 2016, while reaffirming the "BBB-" long-term rating on bonds. Standard & Poor's stated that the revision reflects the view that India's improved political setting offers an environment which is conducive to reforms that could boost growth prospects and improve fiscal management. Going forward, the sovereign ratings outlook will remain dependent on whether the Central Government is able to transition the economy out of a low-growth and high inflation environment, as well as exercise adequate fiscal restraint. In July 2016, Fitch revised its outlook for the Indian banking sector to “Negative” from “Stable” due to the increase in non-performing loans. However, in November 2017, Moody’s upgraded India’s credit rating to “Baa2” from “Baa3” and changed its India rating outlook to “stable” from “positive” citing reforms such as GST, demonetisation, the inflation-targeting monetary policy framework, the Bankruptcy Act, bank recapitalisation, Aadhaar and the Direct Benefits Transfer system. There can be no assurance that these ratings will not be further revised or changed by Standard and Poor’s, Fitch or Moody’s or that any of the other global rating agencies will not downgrade India’s credit rating. Any adverse change in India's credit ratings by international rating agencies may adversely impact the Issuer's business, financial condition and results of operations and limit its access to capital markets.

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Any volatility in the exchange rate may lead to a decline in India's foreign exchange reserves and may affect liquidity and interest rates in the Indian economy, which may impact the Issuer Capital inflows into India have remained extremely volatile responding to concerns about the domestic macroeconomic landscape and changes in the global risk environment. A substantial increase in the import bill, mainly on account of increase in crude oil prices led to a significant widening of the trade deficit that in turn increased the size of the current account deficit from the budget estimates. The primary challenge for the Rupee was the volatile swings in capital flows. The Rupee may come under further pressure given reversal in US monetary policy that is resulting in a rotation of global fund flows from emerging markets to the US markets over the medium term programme. Due to such decrease in Rupee compared to USD there may be a need for intervention which may result in a decline in India's foreign exchange reserves and subsequently reduce the amount of liquidity in the domestic financial system. This in turn could further impact domestic interest rates. Political instability or changes in the Government in India could delay the liberalisation of the Indian economy and adversely affect economic conditions in India generally, which would impact the Issuer's financial results and prospects Since 1991, successive Indian Governments have pursued policies of economic liberalisation, including significantly relaxing restrictions on the private sector. Nevertheless, the roles of the Central Government and State Governments in the Indian economy as producers, consumers and regulators remain significant as independent factors in the Indian economy. In 2014, further to the election of a pro-business majority Government, there has been a distinct increase in expectations for policy and economic reforms of the Indian economy. There is no guarantee that the new Government will be able to enact an optimal set of reforms or that any such reforms would continue or succeed if there were a change in the current majority leadership in the Government in the future. There is also no guarantee that the Government will announce an optimal set of reforms or policies in the future. The rate of economic liberalisation is subject to change and specific laws, and policies affecting banking and finance companies, foreign investment, currency exchange and other matters affecting investment in the Issuer's securities are continuously evolving as well. Other major reforms that have been proposed are the direct tax code and provisions relating to the General Anti-Avoidance Rule (the "GAAR"). Any significant change in India's economic liberalisation, deregulation policies or other major economic reforms could adversely affect business and economic conditions in India generally and the Issuer's business in particular. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely impact the Issuer's business, the trading price of the Notes could decrease and lead to a loss of confidence and impair travel, which could reduce its customers' appetite for its products and services Terrorist attacks, such as those which took place in Mumbai in November 2008, and other acts of violence or war may negatively affect the Issuer's business, the trading price of the Notes and the worldwide financial markets. These acts may also result in a loss of business confidence, make travel and other services more difficult, and as a result, ultimately adversely affect its business. In addition, any deterioration in relations between India and Pakistan or between India and China might result in investors’ concern about stability in the region, which could adversely affect the trading price of the Notes. India has also witnessed civil disturbances in recent years, and future civil unrest as well as other adverse social, economic and political events in India could have an adverse impact on the Issuer. Such

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incidents also create a greater perception about investment in Indian companies involving a greater degree of risk, which in turn could have an adverse impact on the Issuer's business. Natural disasters could have a negative impact on the Indian economy and damage the Issuer's facilities. Natural disasters such as floods, cyclones, earthquakes or famines have in the past had a negative impact on the Indian economy. If any such event were to occur, the business of the Issuer could be affected due to the event itself or due to our inability to effectively manage the effects of the particular event. Potential effects include the damage to infrastructure and the loss of business continuity or business information. In the event that the facilities of the Issuer are affected by any of these factors, its operations may be significantly interrupted, which may materially and adversely affect its business, financial condition and results of operations. The new taxation system in India could adversely affect the business of the Issuer. The Government has implemented major reform in Indian tax laws, namely the provisions relating to the GAAR. The provisions of GAAR have been introduced in the Finance Act, 2012 and have come into effect from 1 April, 2017. The GAAR provisions intend to target and tax arrangements declared as "impermissible avoidance arrangements", which is any arrangement, the main purpose or one of the main purposes of which is to obtain a tax benefit and which satisfies at least one of the following tests: (i) creates rights or obligations which are not ordinarily created between persons dealing at arm's length; (ii) results, directly or indirectly, in misuse, or abuse, of the provisions of the IT ACT; (iii) lacks commercial substance or is deemed to lack commercial substance, in whole or in part; or (iv) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes. Since the GAAR provisions are effective as on date, there can be no assurance that such effects would not adversely affect the business of the Issuer and its future financial performance. RISK IN RELATION TO BONDS

Any downgrading in credit rating of the Bonds may affect the value of Bonds and thus our ability to raise further debts. Investors may not be able to recover, on a timely basis or at all, the full value of the outstanding amount and/or the interest accrued thereon in connection with the Bonds. Changes in interest rate/exchange rates may affect the prices of the Bonds. Payments made on the Bonds will be subordinated to certain tax and other liabilities preferred bylaw. There is a risk of volatility in the price of the Bonds. Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability

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VII. BRIEF SUMMARY OF BUSINESS/ACTIVITIES OF THE ISSUER AND ITS LINE OF

BUSINESS

OVERVIEW The Issuer is an autonomous Authority of the Government of India under the Ministry of Road, Transport & Highways (MoRTH) and was constituted on 15 June 1989 by the NHAI Act, 1988. The NHAI Act governs the functions of the Issuer and frames the rules and regulations pursuant to which it operates. It commenced operations in February 1995. The Issuer was established by the Government of India for the provision and maintenance of a national highway network consistent with global standards, to meet road users' expectations in the most efficient and costeffective manner and to provide a national infrastructure system capable of supporting a sustainable economic growth. The objectives of the Issuer are provided in the NHAI Act pursuant to which the Issuer is responsible for the development, maintenance and management of the national highways entrusted to it by the Government and for matters connected or incidental thereto. The Issuer's functions include the survey, development, maintenance and management of the national highways and, inter alia, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms on or near the highways entrusted to it, to regulate and control regular traffic volume, to develop and provide consultancy and construction services and to collect service and usage fees in accordance with the NHAI Act. The Issuer's original mandate was limited to a number of pilot projects, undertaken with the assistance of the Asian Development Bank (ADB) and Japan Bank of International Cooperation (JBIC). Subsequently, in 1998, the Government, in conjunction with the Issuer, announced the National Highways Development Programme (NHDP) comprising two initial major phases. The First Phase comprised the Golden Quadrilateral project, which established modern road transportation links between a number of major Indian cities including New Delhi, Chennai, Kolkatta, Mumbai, Bangalore and Jaipur. The Golden Quadrilateral project was split into four sections totalling 5,846 km of road network. The Second Phase involved development of the North South corridor and the East West corridor ("NS-EW Corridors"), which established highways through central India connecting Srinagar (North), Kanyakumari (South), Porbandar (West) and Silchar (East), totalling approximately 7,142 km. NHAI's mandate was further expanded by entrustment of National Highway Development Project spanning over 7 phases whereby upgradation of existing highways of over 54,000 km to primarily 4/6 lane was envisaged. Further, in 2017, Government has announced, India's largest ever highway development program, Bharatmala Pariyojna, under which 34,800 km National Highways are to be upgraded in phase 1 at an estimated cost of Rs. 5,35,000 crores. Bharatmala Pariyojna promises to optimise the efficiency of road traffic movement across the country by bridging critical infrastructure

gaps. Since its inception, NHAI has completed 31550 km till March 2018.

Since the inception of the NHDP programme, the approach to implement the NHDP has changed significantly. Initially NHDP projects were implemented through EPC contracts. Since 2005, as a policy, the Government has been implementing NHDP projects through PPP models. The various PPP models followed include BOT models, being the BOT (Toll), BOT (Annuity) and BOT (Hybrid Annuity) models. As of 30 September 2017, the Issuer has awarded 155 BOT (Toll) based contracts at a total project cost of INR 1,260.12 billion, 47 BOT (Annuity) based contracts at a total project cost of INR 288.12 billion, 49 BOT (Hybrid Annuity) based contracted at a total project cost of INR 526.34 billion and 462 EPC contracts at a projected cost of INR 1511.42 billion.

38

The Issuer has adopted a business model that relies on outsourcing a number of activities including design, construction, supervision, operation and maintenance of national highways, rather than undertaking such activities through its own employees. This has allowed the Issuer to maintain an efficient organisational structure which focuses on operational decision-making. The Issuer is also involved in the implementation of the Special Accelerated Road Development Programme for Development –North East (SARDP-NE) to provide connectivity to all the State Capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region. In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase-I to upgrade the road connectivity to the Major Ports in the Country. Port-road connectivity projects are being implemented by setting up SPVs where the Issuer contributes to the project cost by way of an equity investment or equity participation. On 9 October 2017, the Issuer was assigned a rating of Baa3 with positive outlook from Moody's Investor Service ("Moody's"), the same rating as the Government of India. Moody's also highlighted the strong link between the Issuer and the Indian Government, adding that the Issuer’s baseline risk is the same as the default risk of India and indicating a strong correlation of the Issuer's credit rating with the credit rating of the Government of India. Subsequently, on 17 November 2017, Moody's upgraded India's rating from Baa3 to Baa2, also changing the outlook from Stable to Positive. The Issuer was also assigned BBB- rating with stable outlook from S&P Global Ratings. This rating is the same with the rating of the Indian Government. As of the date of this Offering Circular, the Issuer has set up 11 (eleven)* SPVs and 1 (one) associate company. *Moradabad Toll Road Company Limited has been wound-up vide order of Hon’ble NCLT dated 21.05.2019. STRENGTHS Central role in Government initiatives in policy making in the infrastructure sector

The Issuer believes that it has a strategic advantage owing to its strong relationship with the Central Government and the central position it occupies in the plans of the Central Government for the development and implementation of various programmes, policies and structural and procedural reforms for the roads and highway infrastructure sector in India. The Issuer is the primary agency responsible for the development of the national highways infrastructure projects under the NHDP The NHAI Act has designated the Issuer as the primary agency responsible for the development of the national highway infrastructure under the NHDP and related programmes approved by the Central Government. The Issuer manages the development of the NHDP under the mandate of MoRTH and the Central Government. There are no comparable agencies within the Central Government for the development of the national highway infrastructure. This ensures that funds can be deployed to the various infrastructure projects under the NHDP relatively efficiently and also allows the Issuer to enable private sector participation in the development of the national highway infrastructure in India. The PPP models implemented by the Issuer vary from short-term simple management contracts (with or without investment requirements) to long-term and very complex BOT forms like Design, Build,

39

Finance, Operate and Transfer ("DBFOT"). As well as the NHDP, the Issuer has implemented several other highway projects commissioned together with the Government, such as the SARDP-NE, the Port Connectivity projects and other projects. The Issuer believes that the absence of direct competition for the implementation of the projects under the NHDP places it in a unique position as the developer of the national highway infrastructure. Track record of consistent operational performance and growth The Issuer believes that it has established a track record for consistent growth. Pioneering initiatives in the road sector in India The Issuer believes that it has initiated several innovative processes which are different from the practices generally followed in the infrastructure industry. Further to the adoption of performance based contracts with bonus and penalty provisions in both EPC and PPP projects, the Issuer believes that there has been an improvement in construction and service quality associated with such EPC and PPP projects. Detailed project reports ("DPRs") relating to each project currently undergo peer reviews by specialist engineers, selected from a panel of consultants, in order to enhance quality and efficiency. Mechanisms have been implemented to accelerate the process of dispute resolution, especially in relation to EPC projects. Umbrella state support agreements have also been put in place for projects undertaken within a single State. Each State support agreement executed between the Issuer and the State Government provides a legal framework for providing support and services to executing agencies to procure necessary support from the State Government for implementation of the projects in accordance with their defined schedule. Some of the other innovations introduced by the Issuer include e-tendering, e-procurement, introduction and implementation of Wayside Amenities on highways, road asset management systems, advanced traffic management systems, road user applications, green highways, safety engineering and adaptation of the some of the national highways to provide emergency landing facilities for military aircraft. The Issuer has also recently entered into a memorandum of understanding with the Indian Space Research Organisation and the North East Center for Technology Application and Research for the use of spatial technology for the monitoring and managing of national highways. Recently, the Issuer has also been involved in the plans by the Central Government and the Delhi Development Authority to enable the decongestion of Delhi-NCR region. Recently, the Issuer has placed its efforts on a proposal to decongest Delhi through the creation of various radial routes Experienced and committed management and employee base with in-depth sector expertise. The Issuer believes that it has an experienced, qualified and committed management and employee base. The Issuer believes that it is one of the few organisations where people with extensive experience in the road and highways and finance sectors are regularly seconded from various central or state services, departments and organisations to share their expertise. As on March 31, 2018, NHAI has a total

strength of 1079 employees. The Issuer is organised in a manner so as to facilitate faster operational decision-making. Supervision consultants and independent engineers are appointed through a rigorous recruitment process in order to select the most qualified professionals. Furthermore, all projects are monitored centrally at the Issuer's headquarters by both a technical and a financial division. These divisions are operated separately, each with their own management and sub-management structure.

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Economies of scale

Given the scale of operations of the Issuer and the legislative mandate to the Issuer pursuant to the NHAI Act, the Issuer benefits from a large volume of commercial projects. The Issuer enjoys significant cost benefits as a result of its centralised decision making system. The Issuer aims to manage its projects efficiently so that equipment is stored more efficiently, manpower is deployed appropriately and redundant assets are minimised. The Issuer therefore, achieves large scale efficiencies and benefits from economies of scale owing to the size of its operations.

STRATEGIES The Issuer's long term goal is to develop a highly-advanced highway network suitable for meeting the increasing demands of commercial transportation and heavy industrial use. The Issuer aims to achieve this goal through the following areas of strategic focus. Decentralisation of local level decisions and activities The Issuer is aiming to decentralise its field level decisions and activities in order to achieve a greater level of operational efficiency. To this end the Issuer has set up 25 Regional Offices and 179 Project Implementation Units, each with an appropriate management structure for the effective co-ordination and monitoring of local projects. Each Regional Office has been delegated the necessary powers and capacity to engage, where necessary, such technical experts as are required to achieve the most efficient outcome in the implementation of such regional office's projects. Strengthening of core processes for the NHDP implementation and management The Issuer believes that it pays significant attention to institutionalising knowledge and best practices within the project cycle. This includes preparing guidelines of best practice in land acquisition and preconstruction activities adopted in different Indian states, adopting "Resettlement and Rehabilitation" practices, in particular for externally aided projects, and preparing guidelines and standardised procedures for implementing amendments to existing project scopes and timelines. The Issuer has also developed an e-procurement system and an online platform for interaction with various service providers. These steps, the Issuer believes, will enhance its productivity and ability to implement its projects more efficiently. Strengthening of the quality audit and review processes As the Issuer relies frequently on outsourcing in the implementation of projects, its strategy is to invest resources in infrastructure required to carry out advanced audits and performance reviews of its service providers. This strategy includes improving the review process of project designs, greater involvement of the Issuer's field unit and supervision consultants at an earlier stage in a project, strengthening independent quality audits during the construction stage of EPC and PPP projects and receiving continuous feedback from stakeholders which enables it to enhance its wider monitoring framework. Greater focus on human resources The Issuer expects an increase in the scale and complexity of future national highways projects, which will require continued growth within its human resources both in terms of size and expertise. The Issuer plans to extend its outsourcing of personnel to its different areas of operation in order that the right level of expertise is available where necessary. On occasions, especially in relation to projects

41

where land acquisition matters are involved, the Issuer is hiring retired officers who were working in the various state and national level government bodies and also other third party service providers. The Issuer believes that by doing so it shall be able to utilise the experience and expertise of these personnel to enhance its business and areas of operation. Developing strong institutional relationships with external stakeholders The Issuer's strategy is to engage with and build strong relationships with a variety of stakeholders across various aspects of its operations. These include, but are not limited to, the Central Government, the NitiAayog, State and local Governments and agencies, implementing authorities such as the police and health service, contractors, concessionaires, technical, financial and legal consultants, audit firms, financial institutions, investors, industry associations, academic institutions, the media, and both multilateral and bilateral funding agencies such as the World Bank, the ADB and the JBIC. Greater use of information technology ("IT") The rapid advance in IT resources across various aspects of highway Development and management has resulted in a stronger incentive for the Issuer to maximise the application of these resources within its operations. Significant focus on IT is one of the key strategies for the Issuer in its plans for corporate growth. The Issuer has already instituted various information technology systems across its various operations. Examples include e-tendering, electronic tolling, advanced traffic management systems and road asset management systems. The Issuer expects to expend more resources towards the implementation of information technology across it operations to enhance its productivity and its results of operations. THE ISSUER'S PROJECTS The national highways are an integral component of the Indian economy and are fundamental to ensuring the efficient inter-state movement of both passengers and goods. The national highways connect the National and State Capitals of India, the Country's major ports and rail junctions, and provide links with border roads and international highways. The total length of the national highways (including expressways) of India stands at 120,543 km as per the NHAI Annual Report for Fiscal 2018. The progress of the NHDP and other similar projects, as of July 31, 2018, are as follows:

Total Length (Km.)

Already 4/6 Laned (Km.)

Under Implementatio

n (Km.)

Contracts under Implementation

(No.)

Balance length for award

(Km.)

NHDP Golden Quadrilateral

5,846 5,846 0 0 -

North/South-East/West Phase I & II

7,142 6625 318 28 199

Port Connectivity 435 400 35 6 -

NHDP Phase III 11,809 8269 2454 91 1086

NHDP Phase IV 13,203 6255 5318 126 1630

NHDP Phase V 6,500 2900 1927 46 1673

NHDP Phase VI 1,000 143 197 9 660

NHDP Phase VII 700 70 391 13 239

NHDP Total

Other 5,560 1,862 3,698 92 -

SARDP-NE 110 110 110 - 1

Total by the Issuer 52,305* 32,480 14,338 412 5,487

* Total 20,000 km was approved under NHDP Phase IV. Out of which 13,203 km as assigned to the Issuer and the remaining 6,791 km with MoRTH.

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Connectivity to Major Ports In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase-I to upgrade the road connectivity to the major ports in the country. Port-road connectivity projects are being implemented by setting up SPV companies where the Issuer contributes to the project cost by way of an equity investment or equity participation. The following SPVs have been incorporated for developing port connectivity projects:

No. Name of Port Length (km) Name of the SPV

1 Mormugao 18.3 Mormugao Port Road Company Limited

2 Haldia 52.2 Calcutta-Haldia Port Road Company Limited

3 JNPT Package-I 30 Mumbai JNPT Port Road Company Limited

JNPT Package-II 14.4 Mumbai JNPT Port Road Company Limited

4 Vishakapatnam 12.5 Viskhapatnam Port Road Company Limited

5 Chennai-Ennore 30 Chennai-Ennore Port Road Company Limited

6 Cochin 10.4 Cochin Port Road Company Limited

7 Tuticorin 47.2 Tuiticorin Port Road Company Limited

8 Paradip 77 Paradip Port Road Company Limited

9 New Mangalore 37.5 New Mangalore Port Road Company Limited

Total: 329.5

In addition to the above projects, there are two projects being implemented by the Issuer to provide the port connectivity for Chennai Port Gate No. 10 and ICTT Vallarpadam (Cochin) port, as follows:

S. No. Name of Stretch/Port Length (km)

1 Elevated Road from Chennai Port Gate No.10 to Maduravoyal (NH-4) 19

2 NH-47(Km. 337.15) (Cochin) to ICTT Vallarpadam (NH-47C) 17.2

Total: 36.2

SPECIAL ACCELERATED ROAD DEVELOPMENT PROGRAMME FOR NORTH EASTERN REGION ("SARDP-NE")

The Issuer is also involved in the implementation of SARDP-NE to provide connectivity to all the State capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region. The SARDP-NE envisages improvement of road connectivity to the State capitals with district headquarters in the north eastern region. The proposed programme includes improvement of 10,141 km of roads comprising national highways and state roads to be implemented under Phase 'A', Phase 'B' and Arunachal Pradesh Package. Phase A Phase A consists of improvements to 4,099 km of roads consisting of 3,014 km of national highways and 1,085 km of State roads at an estimated cost of Rs. 217.69 billion. Out of 4,099 km, BRO, State PWDs and the National Highways and Infrastructure Development Corporation Limited ("NHIDCL") have been entrusted with responsibility for the development of 3,213 km of roads. The works are in various stages of progress.

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Phase B

Phase B involves adding extra lanes to 3,723 km of national highways and further improvements to state roads. Arunachal Pradesh Package for Roads and Highways

The Arunachal Pradesh Package of Roads and Highways covering 2,319 km of road was approved by the Government as part of SARDP-NE on 9 January 2009. Out of this, 776 km has been approved by the Government for execution on a BOT (Annuity) basis and for the remaining 1,543 km approval for tendering under the EPC basis. Bharatmala Pariyojana As per the MoRTH Government of India the Issuer will develop 34,800 Km of highways under

BharatmalaPariyojana. The total length of 34,800 Km entrusted to NHAI consists of BharatmalaPariyojana under

Ph-I, (24,800 Km); existing NHDP projects under implementation (10,000 Km)

The objective of the project is to optimize the efficiency of freight and passenger movement across India by

bridging critical infrastructure gaps while simultaneously creating direct and indirect employment and enhancing

economic activity. The project lays a special emphasis on fulfilling the connectivity needs of backward and tribal

areas, areas of economic activity, places of religious and tourist interest, border areas, coastal areas and trade

routes with neighbouring countries. Therefore, the Issuer will be responsible for the development and maintenance

of economic corridors, inter corridors and feeder routes, national corridor efficiency improvement, border and

international connectivity roads, coastal and port connectivity roads and green-field expressways among others.

The overall fund requirementis of approximately Rs. 6,92,324 crore (Rs. 3,85,000 Crore for Bharatmala

Pariyojana, Rs.1,50,000 crore for existing NHDP Projects executed by NHAI and Rs. 1,57,324 crore for other

schemes being executed by other agencies for the five years period starting from Fiscal 2018 upto Fiscal

2023.NHAI has availed certain borrowings from Life Insurance Fund and Employees Provident Fund, rupee

denominated Masala Bonds and is proposing to issue BharatmalaBonds and private placement of long term bonds

etc. For the total requirement of Rs. 6,92,324 crores NHAI intends to borrow Rs. 3,77,045 crores from GoI, Rs.

2,09,279 crore by way of market borrowings and Rs. 1,06,000 crore from private investment (PPP).

EASTERN PERIPHERAL EXPRESSWAY

Eastern Peripheral Expressway having a length of 135 Kms was completed in a record time of 500 days much

before the stipulated period of completion. This is a prestigious project of the Government of India which was

inaugurated by the Hon’ble Prime Minister in the last week of May 2018. This expressway is an access control

expressway and the only expressway in India where the toll is charged for the actual journey undertaken by the

users.

TOLL OPERATE TRANSFER MODEL (TOT)

NHAI bided a bundle of ten projects for ToT and the NHAI could fetch Rs. 9,682 crore. This is the beginning of

ToT model and NHAI in due course would be awarding the work of ToT for many more projects in the time to

come. The ToTproceeds which has been deposited to Consolidated Fund of India (CFI) is ring fenced for road

projects and thus will be utilized by NHAI for this purpose.

OVERSEAS PROJECT The Central Government has mandated that the Issuer undertakes management and consultancy services in connection with construction and improvement of a two-lane highway in the Kalewa-Yargi section of the

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proposed India-Myanmar-Thailand Trilateral Highway. The highway will connect India with Thailand through Myanmar. The cost of this overseas project is estimated to be Rs. 11.70 billion and is fully funded by the Central Government through the Ministry of External Affairs (the “MEA”). According to an agreement between the Issuer and the MEA, the MEA will reimburse construction cost to the Issuer in phases and the Issuer will receive a service fee amounting to 6 per cent. of the lower of the estimated cost of construction and the tendered construction bid. The Issuer has issued the letter of award to Punj Lloyd and Varaha Infra joint venture, the successful bidder, for the construction of the highway. The project is expected to be completed within 36 months from the date of the award. Government as the policy maker Pursuant to the NHAI Act, the Central Government may direct that any function in relation to thedevelopment or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto. The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act. FINANCING As the Issuer has been created to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions. The Issuer receives its funding through (i) support from the Government of India in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) Internal and External Borrowing Recourses (IEBR) i.e. market borrowings (both domestic and international). The development and maintenance of National Highways is financed through, (i) Government’s Gross Budgetary Support (GBS) and Additional Budgetary Support (ABS); (ii) Dedicated accruals under Central Road Fund (share in the levy of cess on fuel); (iii) Lending by international institutions (World Bank, ADB and JBIC); (iv) private financing through PPP framework including in DBFOT pattern – investment by private firm and return through levy and retention of user fee, BOT (annuity) pattern – investment by private firm and return through semi-annual pre-determined payments from NHAI as per bid, and special purpose vehicle with equity participation by NHAI; and (v) market borrowing (including funds raised through capital gain tax exemption bonds under section 54EC of the Income Tax Act and long term tax free bonds, taxable bonds, loans from GoI, NSSF fund). During the year 2018-2019, a sum of Rs. 11,569.00 crore was received as Cess Funds.

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Loan assistance from multilateral agencies NHAI is implementing some projects under NHDP with external assistance in the form of loan from multilateral development agencies like World Bank (WB), Asian Development Bank (ADB) and Japan Bank of International Cooperation (JBIC). The loans for NHAI projects tied up with these multilateral agencies, except for one ADB loan for Surat Manor projects, are passed on to NHAI by the GoI in Rupees as 80% grant and 20% loan. The loan component is repaid to the Government by NHAI and repayments to these agencies are in turn done by GoI. The following table sets out the externally aided projects of the Issuer : Summary of Externally Aided Projects

Category

Awarded Awarded Cost

(Rs. in Crore)

Completed

No. of

Contracts

Length in km No. of

Contracts

Length in km

World Bank Funded Projects

NHDP Phase I 18 983 5,538 18 982

GQ 18 983 5,538 18 982

Others - - - - -

NHDP Phase II

(EW Corridors)

10 408 2,587 10 409

Sub-Total A 28 1,391 8,125 28 1,391

ADB Funded Projects

NHDP Phase I 10 615 1,866 10 615

GQ 9 567 1,807 9 567

Others 1 48 59 1 48

NHDP Phase II

(NS & EW

Corridors)

31 1,638 7,565 30 1,584

Sub-Total B 41 2,253 9,431 40 2,199

JBIC Funded Projects

NHDP Phase I 7 150 634 7 150

GQ 5 111 333 5 111

Others 2 39 301 2 39

Sub-Total C 7 150 634 7 150

JICA ODA Funded Projects

NHDP Phase III 1 127 1027 - -

Sub-Total D 1 127 1027 - -

Total (A+B+C+D) 77 3921 19217 75 3740

WB/NHAI 2 79 621 0 0

Grand Total 79 4000 19838 75 3740

NHAI also has a provision for providing grant upto 40% of the project cost to make projects commercially viable. However, the quantum of grant is decided on a case to case basis and typically constitutes the bid parameter in BOT projects. The disbursement of such grant is subject to the provisions of project concession agreements.

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NHAI projects, with higher traffic volumes, have also received Negative Grant (upfront payment payable by successful bidder to NHAI) instead of grant/VGF as an outcome of the competitive bidding process. Further, under the revised MCA, projects under BOT/DBFOT framework have also been awarded on a revenue share/premium basis, where the bidder offering the highest revenue share/premium is awarded the project. These revenues are also ploughed back for the development and maintenance of National Highways. Market Borrowing The Issuer is authorised to raise funds through the issue of bonds both on the domestic and international capital markets. SUMMARY OF INDEBTEDNESS The following table sets forth the details of the Issuers' indebtedness as of the dates mentioned:

31 March 2018 (INR in Lac)



Long Term Borrowings

Secured Loans

Capital Gains Tax Free Bonds- 54EC 16,51,132.50

13,19,731.60

10,56,670.30

Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 11-12

10,00,000.00

10,00,000.00

10,00,000.00

Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 13¬14

5,00,000.00

5,00,000.00

5,00,000.00

Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 15-16

19,00,000.00

19,00,000.00

19,00,000.00

Taxable Bonds (25 Yrs, 5 Yrs & 30 Yrs) 2016-17

27,54,500.00

27,54,500.00

-

Taxable Bonds (15 Yrs, 5 Yrs & 30 Yrs) 2017-18

20,87,500.00

-

-

Taxable Bonds (30 Yrs with call option after 10 Yrs) 2018-19

Rupee Denominated Offshore (Masala) Bonds 2017-18 3,00,000.00

-

-

Loan from National Small Saving Fund (NSSF, MoF, GOI in FY 2017-18) 20,00,000.00

-

-

Loan from ADB - (Surat Manor Project) 59,283.46

64,233.11

70,366.40

Total 1,22,52,415.96

75,38,464.71

45,27,036.70

PUBLIC PRIVATE PARTNERSHIP ("PPP") IN HIGHWAY DEVELOPMENT

PPP is the Issuer's preferred mode of delivery for future phases of the BharatmalaPariyojana and NHDP. There are a number of forms of PPP which are popular in India and have been used by the Issuer for development of the national highways:

47

Build, Operate and Transfer ("BOT") (Toll) Under the BOT (Toll) model, private developers and operators are awarded project contracts where they are entitled to collect and retain toll revenues for a certain tenure known as the concession period. Toll revenues are prescribed by the Issuer on a "per vehicle per km" basis for different types of vehicles. A model concession agreement for BOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators. Build, Operate and Transfer ("BOT") (Annuity) In the BOT (Annuity) model, the concessionaire bids for projects on the basis of annuity payments to be received from the Issuer that would cover the construction, operational and maintenance costs of the project and cater for an expected return on the investment. The annuities are paid semi-annually by the Issuer to the concessionaire and are linked to performance covenants. The concessionaire does not bear the traffic or tolling risk in these contracts. Design, Build, Finance, Operate and Transfer ("DBFOT") The DBFOT model is similar to the BOT (Toll) and BOT (Annuity) model. However, in the DBFOT model, the concessionaire is also responsible for the design, building, financing, operation and maintenance aspects of the project. A model concession agreement for DBFOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators. Hybrid Annuity Model ("HAM") The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer. The Hybrid Annuity Model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction period. Project life cycle cost defined as net present value ("NPV") of the quoted bid project cost plus NPV of the operations and maintenance (O&M) cost for the entire operations period is the bid parameter. The project is awarded to the developer quoting the lowest project life cycle cost where "project life cycle

cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and

48

maintenance risks. Since the Government will bear 40 per cent of the project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent. upfront funding spread over the 30-36 months of construction period, and the private participant would be required to bear the balance 60 per cent of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of Hybrid Annuity Model compared with EPC model. Further, the annuity nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion. Operate, Maintain and Transfer ("OMT") Under the OMT model, toll collection and highway maintenance are integrated and awarded to one private operator (traditionally, tolling agents have been responsible for the collection of toll revenue, with various subcontractors undertaking road maintenance). Project construction and development will remain to be the responsibility of a separately appointed EPC contractor until completion, at which point such private operator will assume responsibility for collection of tolls in return for their maintenance of the highways and the provision of essential facilities such as emergency and safety services. The Issuer has recently awarded a number of highway projects to the private sector under the OMT model. Engineering, Procurement and Construction ("EPC") Under the EPC model, a single contractor takes responsibility for all elements of the engineering, procurement, construction and maintenance aspects of the project. This is different from a traditional EPC contract, whereby the contractor does not provide for maintenance under the initial contract. Under the EPC model, the contractor will quote for the cost of upgrading and maintaining the highway at the outsetand will be required to provide such maintenance for two years' post completion of the construction. The cost of the project is borne by the Issuer. Refinancing and Re-structuring: Refinancing and restructuring of a project is undertaken by the concessionaire to take advantage among others of the lower rate of interest, elongated tenure of payment.

Infrastructure Debt Funds: IDF are an investment vehicle which can be sponsored by commercial banks and NBFCs in which domestic/off shore institutional investors and in particular insurance and pension funds can invest through units and bonds issued by IDF. It offers among others the benefit of lower interest rates improving the viability of projects and offering a better return on equity. Since 2014, IDF have been established by ICICI Bank, L&T and IDBI.

Change of ownership: The provision of divestment in PPP projects are not uniformed overall concession agreement. Before 2009 concessions promoters has to hold at least 26% of the equity throughout the concession period. After 2009 the concessionaire can divest 100% of its equity two years after the completion of the said construction. The CCEA has allowed such divestment in all PPP Projects two years after the completion of the said construction subject to a subsequent investment in certain projects such as incomplete NHAI Projects, other Highway Projects, Power Sector Project and to retire debt to Financial Institution in any other Infrastructure Project.

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Premium Deferment: The cost of a BOT (Toll) project awarded on premium includes other than cost of construction committed premium payment to the Government, operation and maintenance cost and debt servicing cost. The primary object of the deferment is to revive any projects bid during 2011-12 that were facing financial stress due to the economic downturn. Pursuant the CCEA decision (MoRTH letter no.37012/22/2011/H(pt.III) dated 04/03/2014) the premium has been deferred in 21 cases.

One-time Fund Infusion Scheme: The CCEA has approved a scheme to revive and quickly bring languishing project to physical completion by providing financial assistance as loan at bank rate + 2%.

Infrastructure Investment Trust (InVIT) for Concessionaires: InvIT is a mechanism that enables developers of infrastructure assets to monetise their assets by pooling multiple projects under a single entity (trust structure). Currently, Government Securities or G-secs are the only other instruments with such a long life. The sponsor shall hold minimum 15% of the units issued by the InvIT with a lock-in period of three years from the date of issuance of units. The Minimum Investment limit is Rs.10 lac per investor helps monetize revenue generating road assets thereby increasing the propensity of bidders to invest in new road projects. It will lower the cost of capital by attracting long term investors (particularly pension and insurance funds) in completed projects. It will help reduce NPA incidence in commercial Banks, in respect of highway projects. InvIT for IRB, Reliance Infra and ILFS were approved by NHAI. Incentives for Private Sector Participation The Government has put in place financial incentives to encourage increased private sector participation in the road sector. Initiatives taken by the Government include:

i) a declaration of the road sector as an industry; ii) the provision of a capital grants subsidy of up to 40 percent of a project's costs to enhance the

viability of a project on a case-by-case basis; iii) a duty-free import of specifically identified high-quality construction plant and equipment; iv) a 100 percenttax exemption in any consecutive 10 years within a period of 20 years after

completion of construction projects which involve an addition of new lanes; v) an undertaking by the Government to meet all expenses relating to land acquisition and other

preconstruction activities (which, in essence, allows for construction and development on encumbrance-free land); and

vi) an allowance for foreign direct investment of up to 100 percent in the road sector. Bidding Process The general procedure for the selection of concessionaires adopted by the Issuer involves a two-stage bidding process. Projects are awarded as per the model documents prepared by the Issuer and the Central Government such as Request for Qualification ("RFQ"), Request for Proposal ("RFP") and concession agreements. The Issuer amends these model documents based on project specific requirements. The two stage process involves:

Stage 1: Pre-qualification on the basis of technical expertise and financial position of the firm and its track record in similar projects which meets the minimum criteria set out in the RFQ document. Stage 2: Commercial bids from pre-qualified bidders are invited through issue of RFPs. For BOT (Toll) projects the bid parameter is the premium offered to the Issuer or the grant sought from the Issuer. In BOT (Annuity) projects the bid parameter is the semi-annual annuity sought from the Issuer.

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The Government has put in place appropriate policies and other institutional and regulatory mechanisms including a set of fiscal and financial incentives to encourage increased private sector participation in the road sector. Bidding process for Engineering, Procurement and Construction ("EPC") projects

The Issuer has also adopted a single stage two part system for the selection of the bidder for award of a project. Under this process, the bid shall be invited under two parts. Eligibility and qualification of the bidder will be first examined based on the details submitted under the technical bid with respect to eligibility and qualifications criteria prescribed in the RFP. The financial bid shall only be opened to those bidders whose technical bids satisfy the eligibility and qualifications requirements as per the RFP. RELATIONSHIP WITH THE GOVERNMENT

NHAI has relationships with the Government in several contexts as described below:

Government as the policy maker

Statutory Powers of the Government over NHAI

Government as the Lender

Government as the Regulator Government as the policy maker Pursuant to the NHAI Act, the Central Government may direct that any function in relation to the development or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto. The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act. Statutory powers of the Government over the Issuer Under Section 11 of NHAI Act, the Central Government is empowered to vest or entrust any national highway or stretch thereof to the Issuer by publishing a notification in the Official Gazette. On and from the date of publication of the said Notification, all assets, rights or liabilities of the Central Government in respect of such national highway or stretch thereof stands transferred to the Issuer including but not limited to all debts, contracts, capital expenditure, all sums of money due to the Central Government, suits and any other legal proceedings. Financial Support from the Government

Financial support to the Issuer from the Government comes primarily in the form of yearly budgetary allocations and cess collected by the Government under the CRF Act, part of which is specially allocated for national highways and capital infusion in the form of loans. The NHAI Act provides for the Central Government to provide any capital that may be required by the Issuer or pay by way of loans or grants such sums of money as it may consider necessary to ensure the efficient discharge of

51

the Issuer's functions. The NHAI Act also provides for the constitution of the National Highways Authority of India Fund, a provider of capital for the collection of any grants, aid, loan facilities or any other sums received by the Issuer, under which it can draw down to meet project expenses, procurement and other ongoing costs. Alternatively, the Central Government regularly provides consent to the Issuer to raise funds through the issuance of bonds and other debt securities both on the domestic and international capital markets. As the Issuer has been set up to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions. The Issuer receives its funding through (i) support from the Government in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) market borrowings. The development and maintenance of the national highways is financed through (i) the Government's gross budgetary support and ABS, (ii) dedicated accruals under Central Road Fund (share in the levy of cess on fuel),(iii) lending by international institutions, (iv) private financing through PPP framework including DBFOT and SPVs with equity participation by the Issuer and (v) market borrowing (including funds raised through capital gain tax exemption bonds, Masala Bondsand long term tax free bonds). The Government as the regulator The NHAI Act also designates the Central Government as the principal regulator of the Issuer. The Central Government has a range of powers enabling it to exercise a broad degree of control over the functioning of the Issuer, including over the manner in which the Issuer may invest its funds or maintain its accounts. The NHAI Act stipulates that the Issuer shall remain bound by the directions of the Central Government on questions of policy. The Central Government may suspend the Issuer from its management role on any of its national highways projects, or alternatively replace the Issuer in its management role entirely if it is of the opinion that the Issuer is either unable to discharge its functions and duties effectively, or if it persistently fails to comply with any direction of the Central Government. The Central Government is further empowered to make rules for giving effect to the provisions of the NHAI Act in certain matters which include but are not limited to matters relating to manner in which the Issuer may invest its funds or maintain its accounts. B. K. Chaturvedi Committee Report In order to resolve the procedural hurdles to the national highways projects as well as to address the financing needs of the road sector, the Central Government established the B. K. Chaturvedi Committee ("Committee") headed by Shri B.K. Chaturvedi, Member, Planning Commission. Amongst the other recommendations the Committee made the following recommendations which also has had the in-principle approval of the Central Government:

i) issuance of tax exempted bonds; ii) guarantee cover for any borrowing by the Issuer; iii) out of the borrowing approval of Rs. 300 billion earlier provided to Indian Infrastructure

Finance Company Limited ("IIFCL"), Rs. 100 billion under a fiscal stimulus package to be transferred to the Issuer, as per the its borrowing requirement;

iv) assistance in negotiating non-sovereign multilateral loans from organisations such as the World Bank, the ADB and the JBIC by providing back to back support, if necessary; and

52

v) providing a letter of comfort from the Ministry of Finance confirming the availability of cess at least till 2030-31.

Risk Management Since the Issuer is the implementing agency of the NHDP/Bharatmala, steps have been taken for restructuring and strengthening the Issuer. Institutional mechanisms have been established to address delays in, amongst other things, environmental clearances and land acquisition. There is a particular focus on traffic management and safety related issues through the proposed Directorate of Safety and Traffic Management to be set up by the Central Government. It is expected that these initiatives, once fulfilled, would deliver an efficient and safe highway network across the country. In order to specify the policy and regulatory framework on a fair and transparent basis, a Model concession agreement (MCA) for PPP in respect of the national highways has been prescribed. It is expected that this common framework, based on international best practices, will significantly accelerate the pace of project awards as well as ensure an optimal balance of risk and reward among all project participants. Revenue realisation in BOT (Toll) projects is subject to some risks including, but not limited to variation in traffic, variation in toll rates, additional toll ways and occurrence of premature termination on account of certain events. The relevant concession agreement provides for various risk mitigation mechanisms including changing the concession period, differential toll rates that are linked to the cost of different roads structures and providing for termination payments upon the occurrence of any force majeure event. Risk of Early Termination of Concession: In the event of a default by a concessionaire under the relevant concession agreement and if the concessionaire has failed to cure such default within the specified cure period, the Issuer shall have the right to terminate the agreement. If such default takes place within the relevant construction period, generally no payment is made to the concessionaire and if such default takes place during the operation period, the Issuer generally will only make payment of up to 90 per cent. of the debt due as on the date of such termination to the lender of the concessionaire, less any insurance claim further to which the Issuer will get the right over the relevant asset. Land acquisition risk: The Issuer is responsible for acquiring lands required for the projects. The Issuer acquires land under the National Highways Act, 1956 ("NH Act"). In various parts of the country, the process for lands acquisition is affected by a large number of factors, including but not limited to Government policies and the social and political environment. Also, the process of land acquisition can result in litigations. However, the risk of delay associated with the land acquisition process is mitigated by the Issuer as it generally awards only those projects where land acquisition has already taken place. Approval Risk: The obligation of obtaining approvals and/or permissions is on the concessionaires/contractors. In order to manage these risks, the Issuer provides assistance to the concessionaires/contractors in seeking the approval and/or permission from the relevant authorities. Although the Issuer tries to provide all reasonable support and assistance to the concessionaires/contractors in procuring applicable approvals and/or permissions required from any Government entity, such approvals or permissions may be delayed due to various reasons resulting in delay in completion of the projects. The Issuer generally assists concessionaires/contractors in obtaining the approvals and/or permissions in relation to the following among others:

i) permission of the State Government for extraction of boulders from quarries; ii) permissions of village Panchayats and the Pollution Control Board for installation of crushers; iii) licences for use of explosives; iv) permission of the State Government for drawing water from rivers and/or reservoirs;

53

v) licence(s) from inspectors of factories or other competent authorities and clearance of the Pollution Control Board for setting up concrete batching plants;

vi) clearance from village Panchayats and the Pollution Control Board for setting up asphalt plants;

vii) applicable permits, as required, relating to environmental protection and conservation; viii) permission of State Government for the cutting of trees; and ix) any other permits or clearances required under applicable laws. Force majeure risk: Force majeure risk is applicable across all the business of the Issuer. Factors such as acts of God, epidemics, adverse weather conditions, radioactive contamination, ionising radiation, fire or explosion, strikes or boycotts, the discovery of geological conditions, toxic contamination or archaeological remains on the relevant site, Indirect Political Event(s) and Political Event(s) and change in law are often threats to various projects undertaken by the Issuer. In order to mitigate the losses due to force majeure, the Issuer has a separate mechanism of payment upon the occurrence of a force majeure event. HUMAN RESOURCES

The Issuer employed 1079 employees as of 31 March 2018. The employees include professionals in business management, accountancy, engineering, law, computer science, economics and other relevant disciplines. The Issuer believes that its employees are its most valuable asset and the management believes it has a good relationship with the employees. The Issuer aims to develop a collaborative culture and an ongoing consultative process at various levels of administration within the organisation. The Issuer believes that it has amicable relations with its employees. The management of the Issuer is also in constant dialogue with the employees to avoid any industrial relations actions, including strikes or work stoppages. The computerisation of the Issuer has reduced employee workloads and allowed the Issuer to maintain a relatively lean workforce during the past five to six years despite growing its business. The details of employees of the Issuer as on March 31, 2018 are as follows:

Category of Employees Number of Employees

Regular 394

Deputation 293

Contract 392

Social Awareness programmes promoted by the Issuer

The Issuer actively participates on social reform or national initiatives such as road safety, rehabilitation and resettlement and AIDS awareness. In addition, the Issuer is working towards the concept of "Green Highways" for future projects. In furtherance of the concept of Green Highways, the Issuer is contemplating development of horticulture and greenbelts along highways. INSURANCE The Issuer's policy is to insure its properties adequately against fire and other usual risks. The Issuer's insurance policies are subject to exclusions which are customary for those insurance policies, including those exclusions which relate to war and terrorism-related events. The Issuer believes that its insurance policies as described above are appropriate for its business.

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COMPETITION

Responsibility for all of the national highways vest in the Government, and such responsibility has been designated to the Issuer under the NHDP/Bharatmala and the other programmes entrusted to it. The Issuer aims to build and upgrade the national highways to the highest international standard and is the sole appointed authority in India for overseeing the implementations of national highway projects by private parties or state agencies. Although the Issuer is the sole delegate for this role, roads authorities such as PWDs and other road construction corporations under the control of State or Union Territory governments are also working towards the development and maintenance of roads and certain other national highways, some of which also form part of the NHDP. PROPERTIES

The Issuer holds certain properties in Delhi on a perpetual lease basis. The Issuer also leases 25 Regional Offices and 179 Project Implementation Units throughout India. INFORMATION TECHNOLOGY ("IT") The Issuer is continuing to invest in IT designed to help it better monitor and run its business. The Issuer has deployed the IT system across its organisation. The Issuer's website is designed to provide a comprehensive description of its business. CORPORATE STRUCTURE

The organisation structure of the Issuer is as follows:

CHAIRMAN

MEMBER (A)MEMBER

(PPP)MEMBER (F) CVO

MEMBER

(PROJ)

MEMBER

(Tech)

MEMBER

(PROJ)

CGM

(Admin/HR-I & II)CGM (T)

CGM (Fin) &

CGM (FA)CGM (Vig)CGM (T)CGM (T)CGM (T)

GM

(Admin/HR)GM (T)GM (Fin) DGM (Vig)GM (T)GM (T)GM (T)

DGM/Manager

(Admin/HR)

DGM/Manager

(T)

DGM/Manager

(Fin)Manager (Vig)

DGM/Manager

(T)

DGM/Manager

(T)

DGM/Manager

(T)

55

VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS

(Rs. in lacs)

Sr. No.

Particulars FY 2017-18

(audited)

FY 2016-17 (audited) FY 2015-16 (audited)

1. Capital 16,377,926.38 13,959,380.47 12,551,457.89

2. Reserves & Surplus 0.00 0.00 748.68

3. Capital Grants 1,383,229.45 1,365,643.01 1,366,280.32

4. Borrowings 12,252,415.96 7,538,464.71 4,527,036.70

5. Total Fixed Assets 2,85,71,117.89 21,776,720.00 17,649,443.14

6. Investments (at cost) 93,617.34 90,959.00 121,652.89

7. Current Assets, Loans & Advance

5,490,024.83 4,187,028.21 3,314,307.25

8. Current Liabilities & Provisions

4,141,188.27 3,191,219.03 2,639,879.69

9. Net Current Assets 1,348,836.56 995,809.18 674,427.56

10. Total Income 1,382.30 1,354.40 1,294.24

11. Total Expenditure 40,608.57 29,226.13 24,183.90

12. Profit / (Loss) for the Year (39,226.27) (27,871.73) (22,889.66)

13. Surplus brought forward - - -

14. Surplus carried to Balance Sheet

- - -

IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES

INCLUDING ANYREORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

1. BRIEF BACKGROUND NHAI is an autonomous organisation of the Government of India under the Ministry of Road Transport & Highways and was constituted on June 15, 1989 by an Act of Parliament – The National Highways Authority of India Act, 1988, and was made operational in February, 1995 with the appointment of full time Chairman and other Members. NHAI has an all India presence through its different offices (Regional Offices/Project implementation Units/Corridor Management Units) in different cities. The functioning of NHAI is thus governed by NHAI Act and rules, and regulations framed thereunder. It succeeds the previous Ministry of Surface Transport. 2. CHANGE IN HEAD OFFICE

On September 21, 2000, the Head Office of NHAI was shifted from 1, Eastern Avenue, Maharani Bagh, New Delhi - 110 065 to G - 5 & 6, Sector-10, Dwarka, New Delhi - 110 075 for administrative and operational efficiency. 3. VISION

To meet the nation‘s need for the provision and maintenance of National Highways network to global standards and to meet user‘s expectations in the most time bound and cost effective manner, within the strategic policy frame work set by the GoI and thus promote economic well-being and quality of

56

life of the people. The long term vision of NHAI is to meet the challenges of developing the Nation by providing an unparalleled network of physical connectivity both to the common man as well as to the commercial transportation and for other heavy industrial use. This commitment results in a greater public good and NHAI is a means for achieving that public good for Indian industry as well as the common people at the grassroots level. 4. MAIN OBJECTS The main objects of NHAI are provided in the NHAI Act as per which NHAI is responsible for the development, maintenance and management of National Highways entrusted to it, by the GoI and for matters connected or incidental thereto. NHAI was constituted to survey, develop, maintain and manage National Highways and inter alia to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it, to regulate and control plying of vehicles, to develop and promote consultancy and construction services and to collect fees for services and benefits rendered in accordance with NHAI Act. 5. MAJOR EVENTS

Year: Event:

1989 Establishment of the Issuer under the NHAI Act.

1995 The Issuer became fully operational with the appointment of a full-time Chairman and other Members.

1998 Announcement of the NHDP programme, whereby the Issuer would be entrusted with road construction totalling 46,200 km to be completed in seven phases.

2000 Government approval obtained from the Cabinet Committee on Economic Affairs ("CCEA") for Phase I of the NHDP.

2003 Government approval obtained from CCEA for NHDP Phase II

2005 Government approval obtained from CCEA for NHDP Phase III and IV

2006 Government approval obtained from CCEA for NHDP Phase V and VI

2007 Government approval obtained from CCEA for NHDP Phase VII

2009 Approval received from the Government of India for a revised strategy to implement the NHDP, based on the B. K. Chaturvedi Committee Report.

2012 The Issuer successfully raised the first public issue of tax free bonds under the IT Act totalling an aggregate sum of INR 100 billion.

2014 The Issuer successfully raised a further INR 50 billion through tax free bonds.

2016 The Issuer successfully raised an additional INR 190 billion through tax free bonds.

2017 The Issuer successfully raised an additional INR 275 billion through taxable bonds.

2018

The Issuer successfully raised INR 30 billion through Rupee denominated offshore bonds (Masala bonds) and INR 120 billion as unsecured loan from State Bank of India.

The Issuer registered its logo.

6. HOLDING COMPANY NHAI does not have any holding company.

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7. THE PROMOTER Under Entry 23 of the Union List of the Seventh Schedule to the Constitution of India the development and maintenance of National Highways is vested in Central Government. Further, Section 5 of NHAI Act provides that the Central Government may direct that any function in relation to the development or maintenance of National Highways shall also be exercisable among other by any officer or authority subordinate to the Central Government. In exercise of the above powers vested in the Central Government vide Entry 23 of the Union List of the Seventh Schedule to the Constitution of India and under Section 5 of the NHAI Act, the President of India gave his assent to The National Highways Authority of India Bill, 1988 which was passed by both the Houses of Parliament on December 16, 1988. Accordingly, National Highways Authority of India was established on June 15, 1989 as an autonomous body under the Ministry of Road Transport and Highways, Government of India.

[Intentionally Left Blank]

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8. BRIEF INFORMATION OF SPVs AND ASSOCIATE COMPANY AS ON MARCH 31, 2020

Name Ahmedabad Vadodara Expressway Company Limited

Date of Incorporation April 05, 2000

Registered Office NHAI Corporate Office, Plot G - 5 & 6, Sector -10, Dwarka, New Delhi-110075

Name Calcatta-Haldia Port Road Company limited

Date of Incorporation December 26, 2000

Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075

Name Cochin Port Road Company Limited

Date of Incorporation January 19, 2004

Registered Office G 5 & 6 Sector 10, Dwarka, New Delhi-110075

Name Moradabad Toll Road Company Limited*

Date of Incorporation August 13, 1998

Registered Office 1 Eastern Avenue Maharani Bagh, Sector 10, Dwarka, New Delhi – 110075,

India

* Wound-up as per order of Hon’ble NCLT dated 21.05.2019

Name Mormugao Port Road Company Limited



Name Tuticorin Port Road Company Limited



Name Paradip Port Road Company Limited



Name Vishakhapatnam Port Road Company Limited



Name New Mangalore Port Road Company Limited



Name Chennai-Ennore Port Road Company Limited



Name Mumbai-JNPT Port Road Company Limited



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Name Indian Highways Management Company Limited


Registered Office Room No-402, NHAI HQ, Plot G-5 & 6, Sector -10, Dwarka, New Delhi-

110075

[Intentionally Left Blank]

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X. CAPITAL STRUCTURE

NHAI has not issued any shares against capital and capital grants invested by GoI (in pursuance of NHAI Act). The capital of NHAI as on September 30, 2019, is set forth below:

Details of Capital of NHAI

NHAI has not issued any shares against Capital and Capital Grants invested by GoI (in pursuance of NHAI Act).

The Capital of NHAI as on September 30, 2019, is set forth below:

Particulars Amount

(` in lakhs)

i) Capital u/s 12(i)(b) - Commencing Capital

ii) Capital u/s 17

a) Capital Base 80,100.00

b) Cess Fund (up to March 31, 2019) 1,17,48,765.00

Add:

Cess fund received during Financial Year 2018-19

(up to September 30, 2019)

8,31,800.00

c) Additional Budgetary Support (NHDP and

others)

18,98,254.00

d) Capital – Net off toll collection, negative grant

etc. upto March 31, 2010

6,18,355.88

e) Plough back of Toll Remittance, etc. w.e.f.

April 01, 2010

65,97,466.00

Less:

1) Expenditure on Toll Collection Activities (up to w.e.f.

April 1, 2010)

(2,69,105.22)

2) (Excess)/Surplus of Expenditure on Maintenance of

Highways over Maintenance Grant Received (w.e.f.

April 1, 2010).

(4,95,732.65)

3) Plough back transferred to SPVs (17,407.23)

4) Transfer of Exceptional item from P & L A/c (40,310.88)

Sub-Total 2,08,72,084.89

Total 2,09,52,184.89

Capital History of NHAI upto September 30, 2019

1) Capital Base build-up

There have been no changes in the Capital base build-up of NHAI in the last five years.

2) Cess Fund Build-up

(`In Lakhs)

S. No. Date* Investor Amount Cumulative Amount

1. July 5, 2013 MoRTH, GoI 1,71,436.00 63,71,372.00

2. September 17, 2013 MoRTH, GoI 1,71,436.00 65,42,808.00

3. October 28, 2013 MoRTH, GoI 1,71,436.00 67,14,244.00

61

S. No. Date* Investor Amount Cumulative Amount

4. February 04, 2014 MoRTH, GoI 1,71,437.00 68,85,681.00


6. November 05, 2014 MoRTH, GoI 2,10,299.00 75,74,270.00

7. May 20, 2015 MoRTH, GoI 4,60,500.00 80,34,770.00

8. July 23, 2015 MoRTH, GoI 4,60,500.00 84,95,270.00


10. December 28, 2015 MoRTH, GoI 16,05,00.00 91,16,270.00

11. June 9, 2016 MoRTH, GoI 2,00,000.00 93,16,270.00

12. July 5, 2016 MoRTH, GoI 2,00,000.00 95,16,270.00

13. August 5, 2016 MoRTH, GoI 2,07,650.00 97,23,920.00

14. January 18, 2017 MoRTH, GoI (375,000.00) 93,48,920.00

15. April 17, 2017 MoRTH, GoI 3,85,736.00 97,34,656.00

16. July 17, 2017 MoRTH, GoI 3,85,736.00 1,01,20,392.00

17. September 26, 2017 MoRTH, GoI 3,71,473.00 1,04,91,865.00

18. December 20, 2017 MoRTH, GoI 1,00,000.00 1,05,91,865.00

19. April 12, 2018 MoRTH, GoI 4,02,300.00 1,09,94,165.00

20. June 15, 2018 MoRTH, GoI 4,02,300.00 1,13,96,465.00


22. Feburary 11, 2019 MoRTH, GoI 50,000.00 1,17,48,765.00

23. June 21, 2019 MoRTH, GoI 2,06,720.00 1,19,55,485.00

24. August 28, 2019 MoRTH, GoI 2,31,130.00 1,21,86,615.00


* Date of Sanction and not the date of release of funds.

3) Additional Budgetary Support (NHDP and others) Build-up

(` In lakhs)

S.

No.

Date* Investor Amount Cumulative Amount

1. March 26, 2013 MoRTH 20,074.00 508,462.00

2. March 26, 2013 MoRTH 4,811.00 513,273.00

3. February 18, 2013 MoRTH 115,954.00 629,227.00

4. March 31, 2013 MoRTH 7,058.00 636,285.00

5. May 08, 2013 MoRTH 10,000.00 646,285.00

6. June 27, 2013 MoRTH 40,000.00 686,285.00

7. January 13, 2014 MoRTH 17,826.00 704,111.00

8. January 13, 2014 MoRTH 17,214.00 721,325.00

9. 31-Mar-15 MoRTH 60,000.00 781,325.00

10. March 29, 2016 MoRTH 37,027.00 818,352.00

11. April 29, 2016 MoRTH 1,000.00 819,352.00

12. Jun 02, 2016 MoRTH 10,000.00 829,352.00

13. September 23, 2016 MoRTH 375,000.00 12,04,352.00

14. January 12, 2017 MoRTH 4,000.00 12,08,352.00

15. March 09, 2017 MoRTH 100,000.00 13,08,352.00

16. March 23, 2017 MoRTH 50,902.00 13,59,254.00

17. 31-Mar-17 MoRTH 24,000.00 13,83,254.00

18. April 03, 2017 MoRTH 13,000.00 13,96,254.00

62

19. December 26, 2017 MoRTH 150,000.00 15,46,254.00

20. February 23, 2017 MoRTH 150,000.00 16,96,254.00

21. March 07, 2018 MoRTH 90,000.00 17,86,254.00

22. March 19, 2018 MoRTH 12,000.00 17,98,254.00

23. August 26, 2019 MoRTH 1,00,000.00 18,98,254.00 *Date of Sanction and not the date of release of funds.

4) Capital – Net off toll collection, negative grant etc. upto March 31, 2010

The GoI has decided that from April 1, 2010 onwards, the toll revenue, shared revenue and negative grant

collected by NHAI should be deposited in the Consolidated Fund of India and additional budgetary

provisions would be provided for expenditure from the Consolidated Fund of India in line with the amount

deposited by NHAI in Consolidated Fund of India.

Accordingly, net current liability of pre April 1, 2010 period on account of toll and negative grant etc. stood

at Rs. 618,355.88 lakhs. This amount had already been utilised on project development and was no longer

payable to GoI. During Financial Year 2012-13, the same has been transferred to capital.

5) Additional Budgetary Support (Plough back of Toll, Revenue Sharing, etc.) Build-up

(` in Lac)

S. No. Date* Investor Amount Cumulative

Amount

1. June 26, 2013 MoRTH, GoI 1,19,250.00 7,28,539.00




5. July 26, 2014 MoRTH, GoI 1,36,200.00 12,22,489.00




9. May 25, 2015 MoRTH, GoI 1,62,500.00 17,93,589.00

10. July 30, 2015 MoRTH, GoI 1,62,500.00 19,56,089.00



13. May 17, 2016 MoRTH, GoI 1,25,000.00 24,06,089.00

14. July 28, 2016 MoRTH, GoI 1,25,000.00 25,31,089.00


16. January 18, 2017 MoRTH, GoI 3,75,000.00 30,31,089.00

17. April 20, 2017 MoRTH, GoI 2,11,553.00 32,42,642.00

18. July 17,2017 MoRTH, GoI 2,11,554.00 3,454,196.00



21. April 12, 2018 MoRTH, GoI 2,39,300.00 41,16,603.00

22. June 15, 2018 MoRTH, GoI 2,39,300.00 43,55,903.00


24. December 28,2018 MoRTH, GoI 2,39,113.00 48,34,316.00

25. May 31, 2019 MoRTH, GoI 2,65,000.00 50,99,316.00

26. August 26, 2019 MoRTH, GoI 2,65,000.00 53,64,316.00


63

* Date of Sanction and not the date of release of funds.

6) Additional Budgetary Support (Plough back of Toll, Operate & Transfer (TOT)

(` in Lac)

S.

No.

Date* Investor Amount Cumulative Amount

1. Feburary 20, 2019 MoRTH, GoI 4,28,269.00 4,28,269.00

2. March 12, 2019 MoRTH, GoI 4,84,075.00 9,12,344.00

3. March 20, 2019 MoRTH, GoI 55,806.00 9,68,150.00

2. DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 1 YEAR None 3. DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THE LAST 1 YEAR

None 4. DISCLOSURES PERTAINING TO WILFUL DEFAULT None of our members are wilful defaulter 5. SHAREHOLDING PATTERN OF THE ISSUER (as on MARCH 31, 2020)

NHAI is an autonomous body constituted by an act of Parliament - The National Highways Authority of India Act, 1988, under the Ministry of Road Transport & Highways, Government of India. NHAI has not issued any shares against capital and capital grants invested by Government of India (in pursuance of NHAI Act). The entire capital base of NHAI is contributed by the Ministry of Road Transport & Highways, Government of India and as such, 100% owner’s capital in NHAI is held by the Government of India. The promoters have not pledged or encumbered by their shareholding in the Issuer.

6. TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER (AS ON MARCH 31, 2020)

NHAI is an entity constituted under the NHAI Act and therefore does not have any equity shares.

7. PROMOTER HOLDING IN THE ISSUER (AS ON MARCH 31, 2020)

The entire capital base of NHAI is contributed by the Ministry of Road Transport & Highways, Government of India and as such, 100% capital in NHAI is held by the Government of India.

8. GROSS BORROWINGS OF THE ISSUER (AS ON MARCH 31, 2020) A) DEBT OUTSTANDING

As on March 31, 2020, we had outstanding secured borrowings of approximately Rs. 1,60,28,216* Lakh and unsecured borrowings of Rs. 88,59,700 Lakh.

64

Bonds Outstanding as on March 31, 2020, Issued by the Authority:

Set forth below is a brief summary of our significant outstanding bonds as on March 31, 2020, together with a brief description of certain significant terms of such financing arrangements. (i) SECURED BORROWINGS a) BONDS ISSUED BY NHAI Capital gains tax exemption bonds under Section 54EC of the Income Tax Act. Set forth below is a brief summary of our outstanding capital gains tax exemption bonds issued under Section 54EC of the IT Act as on March 31, 2020, together with a brief description of certain significant terms of such financing arrangements. These bonds are not listed on any stock exchange. The bonds are secured by mortgage over NHAI’s immovable property, located in Gujarat, or such other immovable property that may be agreed between NHAI and the Trustees for the bondholders ranking pari-passu with the mortgages created and/or to be created on the said property for securing bonds or any other instrument.

Sl.

No.

Debenture Series

Tenor/Period of Maturity

Coupon Total Value of

Outstanding Bonds (in lakhs Rs.)

Date of

Allotment

Redemption Date/

Schedule

Credit Rating Trustee

1. NHAI Bonds Series -XVIII (2017-18)

3 years from the Deemed Date of Allotment

5.25% payable annually.

6,65,741.30 On Tap basis

Bullet, at the time of maturity i.e. 3 years

AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

SBICAP Trustee Company Limited

2. NHAI Bonds Series -XIX (2018-19)



4,70,635.0

0

On Tap basis



Vistra ITCL India Limited

3. NHAI Bonds Series -XX (2019-20)



4,45,200.0

0*

On Tap basis


AAA by CRISIL, AAA by CARE AAA by India Ratings

Beacon Trusteeship Limited

**Allotment of bonds for the Month of March-2020 is still under process.

Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act.

Set forth below is a brief summary of our outstanding Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act, together with a brief description of certain significant terms. The bonds are secured by way of pari-passu mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures constructed on national highways except those under Surat-Manor Tollways Project, in 64avour of SBICAP Trustee Company Limited.

Sl. No

.

Debenture Series


Coupon Amount (in lakh

Rs. )

Date of Allotmen

t

Redemption Date/

Schedule

Credit Rating Security

1. Tax free secured

10 years from deemed date of allotment

8.20% payable

6,71,408.12

January 25, 2012

January 25, 2022

CRISILAAA/ Stable by CRISIL

The bonds are secured by

65

Sl. No

.

Debenture Series



Rs. )

Date of Allotmen

t

Redemption Date/

Schedule


redeemable non –convertible bonds, in the nature of debentures. (2011-12)

annually

“CARE AAA” by CARE “Fitch AAA(IND) with Stable Outlook” by FITCH

way of pari-passu mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures constructed on national highways except those under Surat-Manor Tollways Project, in favour of SBICAP Trustee Company Limited.

15 years from Deemed Date of Allotment

8.30% payable annually

3,28,591.88

January 25, 2012

January 25, 2027

2. Tax free secured Redeemable non –convertible bonds, in the nature of debentures.** (2013-14)

10 years from deemed date of allotment (Private Placement)


45,200.00 November 25, 2013

November 25, 2023

“CRISIL AAA/Stable” by CRISIL, “CARE AAA” by CARE”Fitch AAA (ind) with Stable Outlook” by FITCH

15 years from Deemed Date of Allotment (Private Placement)


84,960.00 November 25, 2013

November 25, 2028


Public –Retail


30,132.21 February 5, 2014

February 5, 2024

“CRISIL AAA/Stable” by CRISIL,“CARE AAA” by CARE, “BWR AAA with Stable Outlook” by BRICKWORK

Public – Others


47,524.71 February 5, 2014

February 5, 2024


Public –Retail


1,18,980.75

February 5, 2014

February 5, 2029

Public – Others


1,73,202.33

February 5, 2014

February 5, 2029

3. Tax free secured Redeemable non –convertible bonds, in the nature of debentures.*** (2015-16)



54,900.00 September 18, 2015

September 18, 2025




3,32,300.00

September 18, 2015

September 18, 2030



Public –Retail


65,576.03 January 11, 2016

January 11, 2026



Public –Others


68,640.24 January 11, 2016

January 11, 2026


15 years from deemed date of

Public –Retail


2,67,526.27

January 11, 2016

January 11, 2031

AAA by CRISIL, AAA by CARE AAA

66

Sl. No

.

Debenture Series



Rs. )

Date of Allotmen

t

Redemption Date/

Schedule


allotment

by India Ratings AAA by ICRA


Public –Others


5,98,257.46

January 11, 2016

January 11, 2031




45,500.00 February 18, 2016

February 18, 2026




1,37,300.00

February 18, 2016

February 18, 2031



Public –Retail


19,233.40 March 9, 2016

March 9, 2026



Public –Others


97,88.07 March 9, 2016

March 9, 2026



Public –Retail


1,12,766.60

March 9, 2016

March 9, 2031



Public –Others


1,88,211.93

March 9, 2016

March 9, 2031


** At premium of Rs. 45.45 Lakh. *** At a premium of Rs. 169.83 Lakh.

Taxable Bonds

Sl. No.

Debenture Series

Tenor/ Period of Maturity

Coupon Amount (in lakh Rs. )

Date of Allotment Redemption

Date/ Schedul

e


1. Taxable secured Redeemable non –convertible



5,00,000.00 August 3, 2016 August 3, 2041


Bonds have been secured against immovabl

67

Sl. No.

Debenture Series




Date/ Schedul

e


bonds, in the nature of debentures**

(Private Placement)

e Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project in favour of SBICAP Trustee Company Limited].

2.o. Taxable secured Redeemable non –convertible bonds, in the nature of debentures**



5,00,000.00 September 1, 2016 August 30, 2041


3. Taxable secured Redeemable non –convertible bonds, in the nature of debentures**



5,02,000.00 December 23, 2016

December 23, 2021





8,50,000.00 January 24, 2017 January 24, 2047





4,02,500.00 March 20, 2017 March 18, 2022





1,52,500.00 June 06, 2017 June 06, 2022





5,00,000.00 June 16, 2017 June 14, 2047





3,50,000.00 July 14, 2017 July 12, 2047


68

Sl. No.

Debenture Series




Date/ Schedul

e





5,00,000.00 August 24, 2017 August 24, 2032


10. Taxable secured Redeemable non –convertible bonds, in the nature of debentures



85,000.00 November 6, 2017 November 6, 2022

AAA by CRISIL, AAA by CARE AAA by India Ratings and AAA by ICRA

11. Taxable secured Redeemable non –convertible bonds, in the nature of debentures



2,19,500.00 June 28, 2018 June 28, 2048

AAA by CRISIL, AAA by CARE AAA by India Ratings and AAA by ICRA

Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except

12. Taxable secured

Redeemable non

–convertible bonds, in the

nature of

debentures

30 years

from

Deemed Date of

Allotment

(Private Placement)

8.4535

%

payable annuall

y

2,06,020.00 August 2,2018 August

2, 2048 AAA by CRISIL,

AAA by CARE AAA

by India Ratings and AAA by ICRA

13. Taxable secured

Redeemable non –convertible

bonds, in the

nature of debentures

30 years

from Deemed

Date of

Allotment (Private

Placement)

8.1905

% payable

annuall

y

2,05,520.00 December 21, 2018 Decemb

er 21, 2048

AAA by CRISIL,

AAA by CARE AAA by India Ratings

and AAA by ICRA

14. Taxable secured


bonds, in the


10 years

from Deemed

Date of

Allotment (Private

Placement)

8.37% payable

annuall

y

1,67,500.00 January 21, 2019 January

21, 2028

AAA by CRISIL,

AAA by CARE AAA by India Ratings

and AAA by ICRA

15. Taxable secured Redeemable non

–convertible

bonds, in the nature of

debentures

10 years from

Deemed

Date of Allotment

(Private

Placement)

8.49%

payable

annually

2,00,000.00 February 05, 2019 February 05, 2029


by India Ratings

and AAA by ICRA

16. Taxable secured

Redeemable non


nature of

debentures

10 years

from

Deemed Date of

Allotment

(Private Placement)

8.27%

payable annuall

y

5,50,000.00 March 28, 2019 March

28, 2029

AAA by CRISIL,

AAA by CARE AAA

by India Ratings and AAA by ICRA

69

Sl. No.

Debenture Series




Date/ Schedul

e


17. Taxable secured Redeemable non

–convertible


debentures

30 years from

Deemed

Date of Allotment

(Private Placement)

8.179% payable

annuall

y

2,02,500.00 March 29, 2019 March 29, 2049


by India Ratings

and AAA by ICRA

those under the Surat – Manor Tollway Project and Projects awarded under TOT].

18. Taxable secured

Redeemable non


nature of

debentures

10 years

from

Deemed Date of

Allotment

(Private Placement)

8.36%

payable

annually

4,70,900.00 May 20, 2019 May 20,

2030

AAA by CRISIL,

AAA by CARE and

AAA by India Ratings

19. Taxable secured


bonds, in the


10 years

from Deemed

Date of

Allotment (Private

Placement)

7.92%

payable annuall

y

3,42,000.00 June 6, 2019 June 6,

2029

AAA by CRISIL,

AAA by CARE and AAA by India Ratings

20. Taxable secured


bonds, in the


10 years

from Deemed

Date of

Allotment (Private

Placement)

7.80%

payable annuall

y

3,93,000.00 June 26, 2019 June 26,

2029

AAA by CRISIL,


21 Taxable secured Redeemable non

–convertible


debentures

10 years from

Deemed

Date of Allotment

(Private

Placement)

7.49% payable

annuall

y

4,36,500.00 August 1, 2019 August 1, 2029

AAA by CRISIL, AAA by CARE and


22 Taxable secured

Redeemable non


nature of

debentures

10 years

from

Deemed Date of

Allotment

(Private Placement)

7.70%

payable

annually

4,60,200.00 September 13, 2019 Septemb

er 13,

2029

AAA by CRISIL,

AAA by CARE and


23 Taxable secured

Redeemable non


nature of

debentures

15 years

from

Deemed Date of

Allotment

(Private Placement)

7.87%

payable

annually

3,00,000.00 December 9, 2019 Decemb

er 9,

2034

AAA by CRISIL,

AAA by CARE and


24 Taxable secured


bonds, in the


30 years

from Deemed

Date of

Allotment (Private

Placement)

7.98%

payable annuall

y

5,00,000.00 December 23, 2019 Decemb

er 23, 2049

AAA by CRISIL,



–convertible


debentures

10 years from

Deemed

Date of Allotment

(Private

Placement) Debt ETF-I

7.54% payable

annuall

y

1,10,000.00 January 27, 2020 January 27, 2030



70

Sl. No.

Debenture Series




Date/ Schedul

e



–convertible


debentures

15 years from

Deemed

Date of Allotment

(Private Placement)

7.27% payable

annuall

y

5,00,000.00 February 24, 2020 February 24, 2035



27 Taxable secured

Redeemable non


nature of

debentures

30 years

from

Deemed Date of

Allotment

(Private Placement)

7.48%

payable

annually

6,50,000.00 March 6, 2020 March 6,

2050

AAA by CRISIL,

AAA by CARE and


28 Taxable secured


bonds, in the


16 years

from Deemed

Date of

Allotment (Private

Placement)

7.52%

payable annuall

y

4,79,100.00 March 19, 2020 March

19, 2036

AAA by CRISIL,


29 Taxable secured


bonds, in the


15 years

from Deemed

Date of

Allotment (Private

Placement)

7.82%

payable annuall

y

3,11,900.00 March 30, 2020 March

30, 2035

AAA by CRISIL,


(ii) UNSECURED BORROWINGS

Debenture Series Tenor/ Period of Maturity


Date of Allotment

Redemption Date/

Schedule

Credit Rating

Taxable unsecured Redeemable non –convertible bonds, in the nature of debentures



5,00,000.00 22.11.2017 22.11.2032 AAA by CRISIL, AAA by CARE AAA by India Ratings AAA by ICRA

Unsecured loan from State Bank of India

Amount (in Lakh Rs.)

Name of the

Bank Type

of Facility Loan

Documentation Interest/Coupon

Rate Repayment Facility

Sanctioned Amount

availed

State Bank of

India

Term Loan Loan

Agreement

dated August

02, 2018

Monthly MCLR

Rate + 9 bps

Door to door tenor of 10

years (Availability plus

moratorium period of 3

years and repayment

period of 7 years)

25,00,000.00

25,00,000.00

Unsecured loan from Punjab National Bank Amount (in Lakh Rs.)

Name of the

Bank Type

of Facility Loan

Documentation Interest/Coupon

Rate Repayment Facility

Sanctioned Amount

availed

71

Punjab

National

Bank

Term Loan Loan

Agreement

dated March 30,

2020

Monthly MCLR

Rate

Door to door tenor of 10

years (Availability plus

moratorium period of 3

years and repayment

period of 7 years)

5,00,000.00 5,00,000.00

Details of Foreign Currency un-secured loans National Highways Authority of India has secured loan from ADB vide a Loan Agreement dated October 5, 2000 for an amount of $ 180,000,000. However, the total loan availed is $ 149,749,847.25. The loan is secured by the Government of India vide guarantee agreement dated October 5, 2000. The objective for availing the loan was to remove capacity constraints and improve road safety of critical section of the Western Transport corridor connecting Delhi to Mumbai (Surat- Manor Tollway Project).

Name of the Bank

Type of

Facility

Loan Documentation

Interest/Coupon Rate Repayment Facility/ Amount Sanctioned/Availed

Outstanding Amount as

on September 30, 2019 (in Rs. Lakhs)

Asian Development Bank

Term Loan

Loan Agreement dated October 5, 2000

Based on the cost to the bank of such currency or currencies plus a spread, both as reasonably determine by the bank from time to time.

Principal Payment Half Yearly on January 1 and July 1.

$149,749,847.25 59,702.00

Foreign Currency bonds facilities (Unsecured) National Highways Authority of India has raised an amount of Rs. 3,00,000.00 lakh through Masala Bonds in May 2017.

Debenture Series Tenor/ Period of Maturity Coupon Amount (in lakh Rs. )

Date of Allotment

Redemption Date/ Schedule

Credit Rating

Masala Bond -2021


7.30% 3,00,000.00 May 18, 2017 Bullet repayment On May 18, 2022

Unrated

Loan from NSSF

Debenture Series



Date of Loan

Redemption Date/ Schedule

Credit Rating

Loan 10 Years 7.70% Payable half yearly

10,00,000.00 18.01.2018 Bullet repayment On 18.01.2028

Unrated



Unrated



Unrated

Loan 10 years 8.33% Payable half yearly


Unrated



Unrated



Unrated



Unrated

72

B) TERMS OF ASSETS CHARGED AS SECURITY

Principal terms of issue in brief Details of assets charged as security

Debt Facility Tax Free Bonds (10 years) Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2011), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Rs. 6,71,408.12 lacs

Raised in Financial Year 2011-2012

Credit Rating “AAA/Stable” by CRISIL, “AAA” by CARE and “AAA (ind) with Stable Outlook” by FITCH

Coupon Rate 8.20% p.a.

Interest Payment Annual

Maturing in Financial Year 2021-22

Bond Trustee SBICAP Trustee Company Limited


Amount Rs. 3,28,591.88 lac








Amount Rs. 45,200.00 lacs


Credit Rating “AAA/Stable” by CRISIL, “AAA” by CARE and “and BWR AAA by Brickwork













Debt Facility Tax Free Bonds (10 years)

73


Amount Rs. 77,656.92 lacs Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI



Coupon Rate 8.27% p.a. (others); 8.52% p.a. (retail)












Debt Facility Tax Free Bonds (10 years) (Private Placement)

Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI, being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI



Credit Rating “IND AAA” by IRRPL, “CARE AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL

Coupon Rate 7.11%






Amount Rs. 3,32,300.00 lac







74


Debt Facility Tax Free Bonds (10 years) (Public Issue)

Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 65,576.03 lacs

Non Retail 68,640.24 lacs








(Public Issue)

Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 2,67,526.27 lacs

Non-retail Rs. 5,98,257.46 lacs


Credit Rating IND AAA” by IRRPL, “CARE AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL









Credit Rating ““IND AAA” by IRRPL, “CARE AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL

Coupon Rate 7.02%











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Debt Facility Tax Free Bonds (10 years) (Public Issue)

Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 19,233.40 lacs

Non Retail 9,788.07 lacs








(Public Issue)

Secured by a legal mortgage over NHAI’s immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for the financial year ended March 31, 2013), being highway projects comprising of all superstructure including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI

Amount Retail Rs. 1,12,766.60 lac

Non-retail Rs. 1,88,211.93 lac


Credit Rating IND AAA” by IRRPL, “CARE AAA” by CARE, "[ICRA] AAA” by ICRA “CRISIL AAA/Stable” by CRISIL





Debt Facility Bond Series XVIII

Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments



Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL





Debt Facility Bond Series XIX

Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments

Amount Rs. 4,70,669 lacs






Bond Trustee Vistra ITCL India Ltd

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Debt Facility Bond Series XX Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments

Amount 4,45,200.00 lacs*






Bond Trustee Beacon Trusteeship Limited

*Allotment for the month of March-2020 is still under process

Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments

Amount Rs. 5,00000.00 lac







Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








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Debt Facility Bond Series V Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments








Debt Facility Bond Series V

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Amount Rs. 85,000.00 lacs Secured by a legal mortgage over NHAI’s immovable property located at Ahmedabad, Gujarat ranking pari-passu with the mortgage(s) created and/ or to be created on the said property for securing the bonds or any other instruments







Debt Facility Series-I 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.







Bond Trustee VISTRA (ITCL) India Limited

Debt Facility Series-II 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.

Amount Rs. 206020.00 lacs







Debt Facility Series-III 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-IV 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-V 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed Amount Rs. 200000.00 lacs

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Raised in Financial Year 2018-19 assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.






Debt Facility Series-VI 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-VII 2018-19 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-I 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.



Credit Rating AAA by CRISIL, CARE, IRRPL





Debt Facility Series-II 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-III 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects



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Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.





Debt Facility Series-IV 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-V 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-VI 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-VII 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-VIII 2019-20 (ETF-I) Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects



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Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.





Debt Facility Series-IX 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-X 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-XI 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








Debt Facility Series-XII 2019-20 Bonds have been secured against immovable Property situated at Ahmedabad and fixed assets of NHAI being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, culverts, bridges, flyovers and all other super structures constructed on national highways as entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.








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D) TOP 10 BONDHOLDERS OF THE ISSUER AS ON DECEMBER 31, 2019:

S. NO. NAME* VALUE (in Rs. Crores)*

1 LIFE INSURANCE CORPORATION OF INDIA 28,370.00

2 CBT-EPF 34,270.00

3 NPS TRUST 6,065.60

4 THE HONGKONG AND SHANGHAI BANKING CORP. LTD. 1,984.90

5 IDFC BOND FUND 1,697.00

6 AXIS BANK LIMITED 1612.99

7 WIPRO LIMITED 1576.42

8 STATE BANK OF INDIA 1,496.08

9 SBI LIFE INSURANCE CO.LTD 1,455.00

10 HDFC TRUSTEE COMPANY. LTD. 1,355.00

*The investments by above entities through their sub-schemes with same PAN have been clubbed

9. AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SPVs AND ASSOCIATE COMPANY

The Issuer has not issued, in any form, any corporate guarantee in favour of any counter party including its SPVs and associate company.

10. COMMERCIAL PAPER ISSUED BY THE ISSUER The Issuer has not issued any Commercial Paper till the date of this Series-I IM. 11. OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY

CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/PREFERENCE SHARES) (AS ON MARCH, 2020) The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Bonds/ Debentures/ Preference Shares etc.

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12. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR

DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM

LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING

CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS

a. The main constituents of the Issuer’s borrowings are generally in the form of loans from banks and financial institutions, assistance from multilateral and bilateral financing agencies, bonds, debentures etc.

b. The Issuer has been servicing all its principal and interest liabilities on time and there has

been no instance of delay or default since inception. c. The Issuer has neither defaulted in repayment/ redemption of any of its borrowings nor

affected any kind of roll over against any of its borrowings in the past. d. The Issuer has not issued, in any form, any corporate guarantee in favour of any counter

party including its SPVs and associate company.

13. OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION

OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION

NHAI issued bonds at a premium of Rs. 45,45,656.00 for private placement of tax free bonds during Financial Year 2013-14. Further, NHAI has issued bonds at a premium of Rs. 7,03,22,000.00 for private placement of tax free bonds during Financial Year 2015-16. As on March 31, 2020, NHAI has no outstanding borrowings taken/debt securities issued for consideration other than cash, whether in whole or part; at a premium or discount; or in pursuance of an option except as mentioned.

The Issuer hereby confirms that apart from above there has been no material event, development or change having implications on the financials/ credit quality of the Issuer (e.g. any material regulatory proceedings against the Issuer/ promoters of the Issuer, tax litigations resulting in material liabilities, corporate restructuring event etc) at the time of Issue which may affect the Issue or the investor’s decision to invest/ continue to invest in the debt securities of the Issuer.

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XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE The Issuer hereby confirms that, except for any information disclosed in this Series-I IM, there has been no material event, development or change having implications on the financial condition or credit quality of the Issuer at the time of issue of the Notes which may affect the issue of the Notes or an investor's decision to invest or continue to invest in the debt securities of the Issuer.

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XII. SUMMARY TERM SHEET

Issuer National Highways Authority of India (“NHAI”/ the “Authority”/ the “Issuer”)

Issue Size Rs. 1,000 Crore with Green shoe option up to Rs. 2,000 Crore aggregating to Rs. 3,000 Crore

Base issue Size Rs. 1,000 Crore

Green Shoe Option Rs. 2,000 Crore

Issue Subscribed Rs. 1,824 Crore

Security name NHAI Taxable Bonds 2020-21 Series-I

Objects of the Issue To part finance various projects being implemented by NHAI under the Bharatmala Pariyojana and other national highway projects as approved by the Government of India

Instrument Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures

Issuance Mode In Demat mode only

Trading Mode In Demat mode only

Credit Rating “CRISIL AAA/Stable” by CRISIL, “IND AAA/Stable” by IRRPL, “CARE AAA;Stable” by CARE and "[ICRA]AAA” by ICRA.

Seniority Secured, Senior and Unsubordinated

Mode of Issue Private Placement under electronic book mechanism of BSE under SEBI Circular ref SEBI/HO/DDHS/CIR/P/2018/05 dated January 5, 2018 and SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 read with “Operational Guidelines for issuance of Securities on Private Placement basis through an Electronic Book Mechanism” issued by BSE

Security Mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI and projects awarded under TOTs with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect. The Issuer states that will execute the necessary Bond/ Debenture Trust Deed within the timelines prescribed under the SEBI Debt Regulations and will be submit the same with BSE within five working days of execution of the same for uploading on its website. The creation of such security shall be sufficient compliance of the Issuer’s obligation to create security. As per Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) (Second Amendment) Regulations, 2019, where an issuer fails to execute the trust deed within the period specified, without prejudice to any liability arising on account of violation of the provisions of the Act and these Regulations, the issuer shall also pay interest of at least two percent per annum to the debenture holder, over and above the agreed coupon rate, till the execution of the trust deed.

Eligible Investors All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue. All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

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Bond Series NHAI Taxable Bonds 20-21 Series-I

Face Value Rs. 10 lacs per Bond

Minimum bid size and in multiples thereafter

1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and in multiple of 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each thereafter

Issue Price At par

Redemption Amount At par (Rs. 10 lacs) per Bond

Minimum Application

1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and in multiple of 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each thereafter

Tenor 10 years from the Deemed Date of Allotment

Put Option Not applicable

Put Option Price Not applicable

Put Option Date Not applicable

Put Notification Time Not applicable

Call Option Not applicable

Call Option Price Not applicable

Call Option Date Not applicable

Call Notification Time Not applicable

Redemption/ Maturity

10 years from Deemed Date of Allotment i.e. April 28, 2020

Coupon Rate 7.35 % p.a.

Step Up/ Step Down Coupon Rate

Not applicable

Coupon Payment Frequency

Annual

Coupon Payment Dates

First interest payment on April 28, 2021 and thereafter annually every year

Coupon Type Fixed

Coupon Reset Process Not applicable

Day Count Basis Actual/ Actual Interest shall be computed on an “actual/actual basis”. In case of a leap year, if February 29 falls during the tenor of a security, then the number of days shall be reckoned as 366 days (Actual/Actual day count convention) for a whole one year period, irrespective of whether the interest is payable annually, half yearly, quarterly or monthly etc. It is thus emphasized that for a half yearly interest payment, 366 days would be reckoned twice as the denominator; for quarterly interest, four times and for monthly interest payment, twelve times.

Interest on Application Money

Interest at the respective Coupon Rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds for the period starting from and including the date of realization of application money in Issuer’s Bank Account up to one day prior to the Deemed Date of Allotment

Listing Proposed on the Wholesale Debt Market (WDM) segment of BSE Limited (“BSE”)

Trustees IDBI Trusteeship Services Limited

Depository National Securities Depository Limited and Central Depository Services (India) Limited

Registrars Beetal Financial & Computer Services (P) Ltd.

Settlement Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism

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Business Day/ Working Day Convention

Working Days shall be all days on which commercial banks are open for business in the city of Delhi. Further, Sundays, have also been considered as non-Business Days. We have not considered the effect of public holidays as it is difficult to ascertain for future dates. If any of date(s) defined in the Series-I IM, except the Deemed Date of Allotment, the next working day shall be considered as the effective date(s) in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.

Record Date 15 days prior to each Coupon Payment Date and Redemption Date

Effect of holidays

If the interest payment date falls on a holiday, the payment may be made on the following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016. If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. In the event the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Day will be considered as the Record date.

Transaction Documents

The Issuer has executed/ shall execute the documents including but not limited to the following in connection with the Issue: 1. Letter appointing Trustees to the Bondholders; 2. Bond/ Debenture Trust Deed; 3. Rating letter from CRISIL; 4. Rating letter from IRRPL; 5. Rating letter from CARE; 6. Rating letter from ICRA; 7. Tripartite Agreement between the Issuer; Registrar and NSDL for issue of

Bonds in dematerialized form; 8. Tripartite Agreement between the Issuer, Registrar and CDSL for issue of

Bonds in dematerialized form; 9. Letter appointing Registrar; 10. Application made to BSE for seeking its in-principle approval for listing of

Bonds; 11. Trustee Consent Letter; and 12. Board Resolution authorizing issue of Bonds.

Conditions precedent to subscription of Bonds

The subscription from investors shall be accepted for allocation and allotment by the Issuer subject to the following: 1. Rating letters from the aforesaid rating agencies not being more than one

month old from the issue opening date; 2. Letter from the Trustees conveying their consent to act as Trustees for the

Bondholder(s); 3. Application to BSE for seeking its in-principle approval for listing of Bonds.

Conditions subsequent to subscription of Bonds

The Issuer shall ensure that the following documents are executed/ activities are completed as per time frame mentioned elsewhere in this Series-I IM: 1. Credit of demat account(s) of the allottee(s) by number of Bonds allotted

within 1 working days from Bid Closing date; 2. Making listing application to BSE within 15 days from the Deemed Date of

Allotment of Bonds and seeking listing permission within 20 days from the Deemed Date of Allotment of Bonds in pursuance of SEBI Debt Regulations. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00%

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p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders. Besides, the Issuer shall perform all activities, whether mandatory or otherwise, as mentioned elsewhere in this Series-I IM.

3. Execution of bond trust deed within the timelines prescribed under the SEBI Debt Regulations.

Future Borrowings and Automatic Approvals to the Issuer

As long as the Issuer maintains the stipulated security cover in respect NCD’s, the Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form and also issue Debentures / Notes / other securities in any manner and to change its capital structure without the consent of Debenture holders/Debenture Trustee. Further, the Issuer shall not be required to obtain debenture holders/ debenture trustee consent for creating pari-passu charge on the assets given as a security for further borrowings till the time stipulated security cover is maintained. In case, pari-passu letter for any charge creation is requested by the Issuer, Debenture Trustee shall be empowered to issue the same without seeking consent from the Debenture holders, as long as the Issuer satisfies the above requirement of minimum security cover maintenance.

Events of Default If the Issuer commits a default in making payment of any instalment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an “Event of Default” by the Issuer. In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.

Remedies Upon the occurrence of any of the Events of Default, the Trustees shall on instructions from majority Bondholder(s), declare the amounts outstanding to be due and payable forthwith and the security created under the security documents shall become enforceable, and the Trustees shall have the right to enforce any security created pursuant to the security documents towards repayment of the amounts outstanding and/or exercise such other rights as the Trustees may deem fit under the applicable laws.

Cross Default Not Applicable

Role and Responsibilities of Trustees

The Trustees shall protect the interest of the Bondholders in the event of default by the Issuer in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Issuer. No Bondholder shall be entitled to proceed directly against the Issuer unless the Trustees, having become so bound to proceed, fail to do so. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bond/ Debenture Trusteeship Agreement, the Bond/ Debenture Trust Deed, Offer Letter Document and all other related transaction documents, with due care, diligence and loyalty. The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds. The Issuer shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial

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information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Bondholder(s) within two working days of their specific request.

Governing Law and Jurisdiction

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India

Additional Covenants

1. Security Creation: The Issuer states that it will execute the necessary documents for creation of the charge, including the Debenture/ Bond Trust Deed and will be submitting the same with BSE within five working days of execution of the same for uploading on its website.

2. Default in Payment: In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.

3. Listing: The Issuer shall complete all the formalities and seek listing

permission within 20 days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penxal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

Mode of Subscription As per SEBI circular dated January 5, 2018 and August 16, 2018 and operational guidelines of BSE, as amended

Issue/Bid Opening Date

April 27, 2020

Issue/Bid Closing Date

April 27, 2020

Pay-in Date April 28, 2020

Date of Allotment April 28, 2020 (T+1)

Manner of Bidding Closed Book

Mode of Allotment/Allocation option

Uniform Yield

Mode of Settlement Through clearing corporation of BSE

DEBT CAPITAL RATIO

*Debt Capital Ratio as on September 30, 2019 is 0.97 **Projected debt capital ratio post issue is 0.98 Note:

* NHAI does not have any share capital

**1. NHAI Taxable Bonds 2020-21 Series -I Taxable, Secured, Redeemable, Non-Convertible, Non-Cumulative Bonds in the nature of Debentures of face value of Rs. 10 lakhs each for an amount of Rs.1,000 crores and green shoe option of Rs. 2,000 crores aggregating to Rs.3,000 crore. Issue subscribed at an interest rate of 7.35% p.a.

2. Post issue numbers have been calculated after increasing the debt by Rs. 1.824 crore (after adding the subscribed issue) but no corresponding change has been made in capital. Debt taken after 30./09./2019 has not been included for calculation of projected debt capital ratio.

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XIII. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR) SERIES-I IM FOR PRIVATE PLACEMENT OF SECURED, NONCONVERTIBLE, NON-CUMULATIVE, REDEEMABLE, TAXABLE BONDS IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKHS EACH AT PAR AGGREGATING TO TOTAL ISSUE SIZE NOT EXCEEDING RS. 3,000 CRORE WITH A BASE ISSUE SIZE OF RS. 1,000 CRORE AND AN GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO RS. 2,000 CRORE BY NATIONAL HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”) BY WAY OF PRIVATE PLACEMENT.

1. ISSUE SIZE AND SPECIFICATIONS

National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”) to raise Rs.

1,000 Crore with green shoe option to retain oversubscription of Rs. 2,000 Crore aggregating to Rs.

3,000 Crores through issue of Taxable Secured Redeemable Non-Convertible Bonds in the nature of

Debentures (“Bonds”) of face value of Rs. 10.00 lacs each under this Series-I IM.

All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable and as amended from time to time.

2. ELIGIBILITY TO COME OUT WITH THE ISSUE

The Issuer or the person in control of the Issuer, or its promoter, has not been restrained or prohibited or debarred by SEBI/any other Government authority from accessing the securities market or dealing in securities and such direction or order is in force.

3. REGISTRATION AND GOVERNMENT APPROVALS

NHAI can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by NHAI to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.

4. AUTHORITY FOR THE ISSUE

The present Issue is being made pursuant to announcement in Union Budget, NHAI Act and resolution passed by the Members of the Board of NHAI on March 20, 2020, approving the Issue and delegation provided thereunder.

5. OBJECTS OF THE ISSUE

To part finance various projects being implemented by NHAI under the Bharatmala Pariyojana and other national highway projects as approved by the Government of India.

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Further, in accordance with the SEBI Debt Regulations, NHAI shall not utilize the proceeds of the Issue for providing loans to or acquisition of shares of any person who is part of the same group or who is under the same management. Further, NHAI is a statutory authority and, as such, it does not have any identifiable group companies or companies under the same management though it does have shareholding interest in certain Special PurposeVehicles which are engaged in area specific development of port roads.

6. UTILISATION OF ISSUE PROCEEDS

The funds being raised by the Issuer through present issue of Bonds are not meant for financing any particular project. In terms of the SEBI Debt Regulations, there is no requirement for appointment of a monitoring agency in relation to the use of proceeds of the Issue. Members of the Authority shall monitor the utilisation of the proceeds of the Issue. NHAI shall disclose in its financial statements, the utilization of the proceeds of the issue under a separate head along with any details in relation to all such proceeds of the issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. NHAI shall utilize the proceeds of the issue only upon the execution of the documents for creation of security as stated in this Series-I IM and upon the listing of the Bonds. The objects of NHAI as specified in NHAI Act permits it to undertake its existing activities as well as the activities for which the funds are being raised through the Issue.

NHAI undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines/ norms issued by the RBI/ SEBI/ RoC/ Stock Exchange(s).

7. MINIMUM SUBSCRIPTION

In terms of the SEBI Debt Regulations, the Issuer may decide the amount of minimum subscription which it seeks to raise by issue of Bonds and disclose the same in the Series-I IM. The Issuer has decided not to stipulate any minimum subscription for the present Issue and therefore the Issuer shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

8. UNDERWRITING

The present Issue of Bonds is not underwritten.

9. NATURE OF BONDS

The Bonds are to be issued in the form of Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures.

10. FACE VALUE

Each Bond has a face value of Rs. 10 lacs. The Bonds are redeemable at par i.e. for Rs. 10 lacs. 11. SECURITY

The Bonds has been secured by way of mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-

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Manor Tollway Project entrusted to NHAI and projects awarded under ToT with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect. Security document will be executed in respect of the proposed Bonds Issue.

13. DEEMED DATE OF ALLOTMENT

All benefits under the Bonds including payment of interest will accrue to the Bondholders from and including date of allotment being March 19, 2020, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Issuer reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date/ pay in dates is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-pond/ postponed) by the Issuer at its sole and absolute discretion.

14. LETTER(S) OF ALLOTMENT/ BOND CERTIFICATE(S)/ REFUND ORDER(S)/ ISSUE OF

LETTER(S) OF ALLOTMENT

The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.

15. ISSUE OF BOND CERTIFICATE(S)

The initial credit in the account willbe akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.However, in case , if all formalities are not completed the same will be akin to letter of allotment , which on completion of the all statutory formalities, such credit will be akin to a Bond Certificate. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.

16. DEPOSITORY ARRANGEMENTS

The Issuer has appointed Bigshare Services Private Limited. (Address: 1st Floor, Bharat Tin Works Building Opp. Vasant Oasis, Makwana Road Marol, Andheri (E), Mumbai-400059) as theRegistrar (“Registrar”) for the present Bond Issue. The Issuer has entered into necessary depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the Bonds offered under the present Issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Issuer has signed two tripartite agreements as under:

Tripartite Agreement between the Issuer, National Securities Depository Limited

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(“NSDL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.

Tripartite Agreement between the Issuer, Central Depository Services (India) Limited (“CDSL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.

Investors can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.

17. PROCEDURE FOR APPLYING FOR DEMAT FACILITY

a. Applicant(s) should have/ open a Beneficiary Account with any Depository

Participant of NSDL or CDSL. b. The applicant(s) must specify their beneficiary account number and depository

participants ID in the relevant columns of the Application Form. c. If incomplete/incorrect beneficiary account details are given in the Application Form

which does not match with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.

d. The Bonds shall be directly credited to the Beneficiary Account as given in the

Application Form and after due verification, allotment advice/refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant’s Depository Account will be provided to the applicant by the Depository Participant of the applicant.

e. Interest or other benefits with respect to the Bonds would be paid to those bondholders

whose names appear on the list of beneficial owners given by the depositories to the Issuer as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, the Issuer shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Issuer. On receiving such intimation, the Issuer shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

f. Applicants may please note that the Bonds shall be allotted and traded on the stock

exchange(s) only in dematerialized form. 18. FICTITIOUS APPLICATIONS

Any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the Bonds, or otherwise induced a body corporate to allot, register any transfer of Bonds therein to them or any other person in a fictitious name, shall be punishable as per provisions of extant laws.

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19. MARKET LOT

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

20. TRADING OF BONDS

The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of Rs.10 lacs each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lacs and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI.

21. MODE OF TRANSFER OF BONDS

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Issuer.

22. BASIS OF ALLOCATION / ALLOTMENT

Allotment to the bidders shall be done on yield priority basis in the following manner as per SEBI circular dated January 5, 2018 and August 16, 2018 and operational guidelines of BSE:

a) All the bids shall be arranged in the ascending order of the yields, and a cut-off yield

shall be determined. b) All the bids below the cut-off yield shall be accepted and full allotment should be made

to such bidders. c) For all the bids received at cut-off yield, allotment shall be made on pro-rata basis.

23. COMMON FORM OF TRANSFER

The Issuer undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Series-I IM.

24. INTEREST ON APPLICATION MONEY

a. In case of change in Deemed Date of Allotment and in respect of investors who get allotment in the Bonds Issue , interest on application money shall be paid at the coupon rate applicable for bond series (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) from the date of receipt of application money in NHAI’s account

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till one day prior to the date of allotment on the aggregate face value amount of Bonds The interest on Application Money shall be computed as per “Actual/Actual” day count convention. The payment shall be made only through electronic mode. However, in case of rejection of electronic mode, due to incomplete / in correct detail provided by applicant payment may be made through cheque /demand draft. The cheque /demand draft for interest on application money shall be dispatched by the Issuer within 15 days from the Deemed Date of Allotment by registered post to the sole/ first applicant, at the sole risk of the applicant.

b. No interest on Application Money will be paid in respect of applications which are

rejected due to any reason. 25. INTEREST ON THE BONDS

The face value of the Bonds outstanding shall carry interest at the coupon rate from Deemed Date of Allotment and the coupon rate & frequency of payment (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) are mentioned at summary term sheet.

The interest payment shall be made through electronic mode to the bondholders whose names appear on the list of beneficial owners given by the depository participant to R&TAas on the record date fixed by Issuer in the bank account which is linked to the demat of the bondholder. However, in absence of complete bank details i.e. correct/updated bank account number, IFSC/RTGS code /NEFTcode etc., issuer shall be required to make payment through cheques / DDs on the due date at the sole risk of the bondholders. Interest or other benefits with respect to the Bonds would be paid to those Bondholders whose names appear on the list of beneficial owners given by the depository participant to R&TA as on the Record Date.

26. COMPUTATION OF INTEREST

Interest for each of the interest periods shall be computed as per Actual/ Actual day count convention on the face value amount of Bonds outstanding at the respective Coupon Rate rounded off to the nearest Rupee. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the face value amount of Bonds outstanding.

27. RECORD DATE

The ‘Record Date’ for the Bonds shall be 15 days prior to each Coupon Payment Date and Redemption Date. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the Record Date and the Redemption Date. Interest payment and principal repayment shall be made to the person whose name appears as beneficiary with the Depositories as on Record Date. In the event of the Issuer not receiving any notice of transfer at least 15 days before the respective Coupon Payment Date and Redemption Date, the transferees for the Bonds shall not have any claim against the Issuer in respect of amount so paid to the registered Bondholders.

28. DEDUCTION OF TAX AT SOURCE

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source out of interest payable on Bonds.

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Tax exemption certificate/ declaration of non-deduction of tax at source, if applicable, on interest on application money should be submitted along with the Application Form. Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s). In case of tax deducted at source, the Issuer will issue the TDS certificate to the investors.

29. PUT & CALL OPTION

There is no call and put option.

30. REDEMPTION

The face value of the Bonds shall be redeemed at par, on the respective Redemption Dates. The Bonds will not carry any obligation, for interest or otherwise, after the Redemption Date. The Bonds shall be taken as discharged on payment of the redemption amount by the Issuer on the Redemption Date to the registered Bondholders whose name appear in the Register of Bondholders on the Record Date. Such payment will be a legal discharge of the liability of the Issuer towards the Bondholders.

In case any Redemption Date falls on a day which is not a Working Day, the payment due shall be made on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment.

31. ADDITIONAL COVENANTS

1. Security Creation: The Issuer submits that it will execute the necessary documents for creation of the charge, including the Debenture/ Bond Trust Deed within the time prescribed under the SEBI Debt Regulations and shall submit to BSE within five working days of execution of the same for uploading on its website.

2. Default in Payment: In case of default in payment of interest and/or principal redemption

on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.

3. Listing: The Issuer shall complete all the formalities and seek listing permission within 20

days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

32. SETTLEMENT/ PAYMENT ON REDEMPTION

Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Issuer as on the Record Date.

The Bonds shall be taken as discharged on payment of the redemption amount by the Issuer on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment will be a legal discharge of the liability of the Issuer towards the Bondholders. On such payment being made, the Issuer shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted.

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The Issuer’s liability to the Bondholders towards all their rights including for payment or

otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Issuer will not be liable to pay any interest or compensation from the Redemption Date. On the Issuer’s dispatching/ crediting the amount to the Beneficiary(ies) as specified above in respect of the Bonds, the liability of the Issuer shall stand extinguished.

33. EFFECT OF HOLIDAYS

If the interest payment date falls on a holiday, the payment may be made on the following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.

If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. ‘Business Day’ shall be a day on which commercial banks are open for business in the city of Delhi and the days when the money market is functioning in Mumbai. In the event the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Day will be considered as the Record date. The interest/redemption payments shall be made only on the days when the money market is functioning in Mumbai.

Set forth below is an illustration for guidance in respect of the day count convention and effect of holidays on payments. Investors should note that this example is solely for illustrative purposes. We have not considered the effect of public holidays as it is difficult to ascertain for future dates.

Face Value of the Bond (in Rs) – 10,00,000/- Deemed Date of Allotment – April 28, 2020

Redemption date– April 28, 2030 Coupon rate – 7.35 % p.a.

Cash Flows Day, Date Day count

(Actual/ Actual)

No. of Days in Coupon Period

Amount (In Rupees)

1st Coupon Wednesday, April 28, 2021 Actual/Actual 365 73,500

2nd Coupon Thursday, April 28, 2022 Actual/Actual 365 73,500

3rd Coupon Friday, April 28, 2023 Actual/Actual 365 73,500

4th Coupon Monday, April 29, 2024 Actual/Actual 366 73,500

5th Coupon Monday, April 28, 2025 Actual/Actual 365 73,500

6th Coupon Tue, April 28, 2026 Actual/Actual 365 73,500

7th Coupon Wed, April 28, 2027 Actual/Actual 365 73,500

8th Coupon Fri, April 28, 2028 Actual/Actual 366 73,500

9th Coupon Mon, April 30, 2029 Actual/Actual 365 73,500

10th Coupon Fri, April 26, 2030 Actual/Actual 363 73,097

Principal Redemption

10,00,000

NHAI Taxable Bonds 20-21, Series-I

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Assumptions and Notes: 1. The aggregate coupon payable to each Bondholder shall be rounded off to the nearest rupee as per

the Fixed Income Money Market and Derivatives Association handbook on market practices. 2. The actual dates and maturity amount will be in accordance to and in compliance with the

provisions of SEBI circular CIR/IMD/DF-1/122/2016 dated November 11, 2016 giving effect to actual holidays and dates of maturity which qualifies the SEBI requirement.

3. For the purposes of the above illustration, non-business days i.e. Saturdays and Sundays have not been considered. Actual Interest/Maturity payment will be decided in accordance with SEBI regulation.

34. LIST OF BENEFICIAL OWNERS

The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

35. SUCCESSION

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Issuer shall recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s).the Issuer shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.

Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied:

a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that

the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

38. DOCUMENTS TO BE PROVIDED BY SUCCESSFUL BIDDER(S)

Successful bidder(s) need to submit the following documents, along with the Application Form, as applicable:

Certified true copy of the Memorandum and Articles of Association

Certified true copy of the Board Resolution / letter authorizing the investment

Certified true copy of the Power of Attorney

Form 15G/ 15H for investors seeking exemption from TDS –on interest payments

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Relevant certificate(s)/ order(s)/ declaration(s)/ document(s) including order under Section195/ 197 of the Income-tax Act, 1961 on which the Debenture Holder wishes to place reliance for non-deduction of tax at source

SEBI registration certificate

IRDA registration certificate

Specimen signature of the authorised signatories, duly certified by an appropriate authority

Certified true copy of PAN 39. HOW TO APPLY

This Series-I IM is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds issued by the Issuer. The document is for the exclusive use of the institution(s) to whom it is delivered, and it should not be circulated/ distributed to third parties. This being a private placement Issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.

40. APPLICATION PROCESS

Who can bid / invest / apply?

All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue.

All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

Eligible participants bidding on proprietary basis, for an amount equal to or more than Rs.15 crore or 5% of the base issue size, whichever is lower, shall bid directly i.e. shall enter the bids directly on EBP platform.

Provided that the foreign portfolio investors may bid through their custodians.

How to bid?

All Eligible Investors will have to register themselves as a one-time exercise (if not already registered) under the BSE BOND – EBP Platform offered by BSE for participating in the electronic book mechanism. Eligible Investors will also have to complete the mandatory KYC verification process. Investors should refer to the Operational

Guidelines.

The details of the Issue shall be entered on the BSE BOND – EBP Platform by the Issuer at least 2 (two) working days prior to the Issue / Bid Opening Date, in accordance with the Operational Guidelines.

The Issue will be open for bidding for the duration of the bidding window that would be communicated through the Issuer’s bidding announcement on the BSE BOND – EBP Platform, at least 1 (one) working day before the start of the Issue / Bid Opening Date.

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A bidder will only be able to enter the amount & percentage while placing their bids in the BSE BOND-EBP Platform. Some of the key guidelines in terms of the current Operational Guidelines on issuance of securities on private placement basis through an electronic book mechanism, are as follows:

(a) Modification of Bid:

Investors may note that modification of bid is allowed during the bidding period / window.

However, in the last 10 minutes of the bidding period / window, revision of bid is only allowed for upward revision of the bid amount placed by the Investor.

(b) Cancellation of Bid

Investors may note that cancellation of bid is allowed during the bidding period / window. However, in the last 10 minutes of the bidding period / window, no cancellation of bids is permitted.

(c) Multiple Bids

Investors may note that multiple bid is not permitted. If multiple bids are entered by the same Investor, only the first bid will be considered as valid.

(d) Withdrawal of Issue

The Issuer may, at its discretion, withdraw the issue process on the following conditions: i. non-receipt of bids upto the Issue Size; ii. bidder has defaulted on payment towards the allotment, within the stipulated

timeframe, due to which the Issuer is unable to fulfil the Issue Size.

Provided that the Issuer shall accept or withdraw the Issue on the BSE BOND – EBP Platform within 1 (one) hour of the closing of the bidding window, and not later than 6 pm on the Issue/Bidding Closing Date.

However, Investors should refer to the Operational Guidelines as prevailing on the date of the bid.

Provisional/ Final Allocation

Allocation shall be made on a pro rata basis in the multiples of the bidding lot size, i.e., in multiples of Rs. 10,00,000 (Rupees Ten Lakhs).

Post completion of bidding process, the Issuer will upload the provisional allocation on the BSE BOND – EBP Platform. Post receipt of investor details, the Issuer will upload the final allocation file on the BSE BOND – EBP Platform.

Payment Mechanism

Subscription should be as per the final allocation made to the successful bidder(s) as notified by the Issuer by 10:30 am next date of Closing Date.

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Successful bidders should do the funds pay-in in the bank account of as appearing on EBP Platform of BSE.

Successful bidders must do the funds pay-in to the Designated Bank Account in accordance with operational guidelines of BSE EBP PLATFORM. Successful bidders should ensure to do the funds pay-in from their same bank account which is updated by them in the BSE BOND - EBP Platform while placing the bids. In case of mismatch in the bank account details between BSE BOND – EBP Platform and the bank account from which payment is done by the successful bidder, the payment would be returned back.

Note: In case of failure of any successful bidder to complete the funds pay-in by the Pay-in

Time or the funds are not received in the Designated Bank Account of clearing corporation of BSE by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable to the successful bidder.

Funds pay-out would be made to the bank account as appearing on the EBP Platform of BSE.

Application by Successful Bidder(s)

All Application Forms, duly completed, must be delivered by the Pay-in Time to the Issuer by the successful bidder(s), to the attention of Mr. S.Q.Ahmad, GM (Fin) at G-5& 6, Sector 10, Dwarka, Delhi India.Applications for the Debentures must be in the prescribed form and completed in BLOCK LETTERS in English and as per theinstructions contained therein.

41. FORCE MAJEURE

The Issuer reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.

42. APPLICATIONS UNDER POWER OF ATTORNEY

A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Issuer or to the Registrars or to such other person(s) at such other address(es) as may be specified by theIssuer from time to time through a suitable communication.

43. APPLICATION BY MUTUAL FUNDS

In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

43. ACKNOWLEDGEMENTS

No separate receipts will be issued for the application money.

102

45. PAN

Every applicant should mention its Permanent Account Number (“PAN”) allotted under the Income Tax Act, 1961, on the Application Form and attach a self-attested copy as evidence. Application Forms without PAN will be considered as incomplete and are liable to be rejected.

46. SIGNATURES

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

47. NOMINATION FACILITY

As per extant provisions of law, only individuals holding the Bonds as Sole/Joint holder of Bonds can nominate, in the prescribed manner, a person to whom his/ their Bonds shall vest in the event of his/ their death. Non-individuals including holders of Power of Attorney cannot nominate.

48. RIGHT OF BONDHOLDER(S)

Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first. Besides, the Bonds shall be subject to the provisions of NHAI Act, the terms of this Series-I IM and other terms and conditions as may be incorporated in the Bond/ Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.

49. MODIFICATION OF RIGHTS

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative againstthe Issuer where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Issuer.

50. FUTURE BORROWINGS

The Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Issuer may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.

51. BOND/ DEBENTURE REDEMPTION RESERVE (“DRR”)

103

The Corporation is a statutory body constituted under The National Highways Authority of India Act, 1988 and is not a public/ private limited company incorporated under The Companies Act. Therefore, creation of Bond/ Debenture Redemption Reserve is not envisaged for the proposed issue of Bonds. The Corporation has also appointed a Trustee to protect the interest of the Bondholders.

52. NOTICES

All notices required to be given by the Issuer or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one All India English daily newspaper and one regional language newspaper.

All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Issuer or to such persons at such address as may be notified by the Issuer from time to time.

53. JOINT-HOLDERS

Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions of Law.

54. DISPUTES & GOVERNING LAW

The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India.

55. INVESTOR RELATIONS AND GRIEVANCE REDRESSAL

Arrangements have been made to redress investor grievances expeditiously as far as possible, the Issuer endeavours to resolve the investor’s grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at head office of the Issuer. All investors are hereby informed that the Issuer has appointed a Compliance Officer who may be contracted in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Series-I IM.

Date of Subscription The Date of Subscription shall be the date of realisation of proceeds of subscription money in the Designated Bank Account as appearing in the EBP Platform of BSE. Rejection of Applications

The Issuer may reject any application on one or more technical grounds, including but not restricted to:

Bank account details not given

104

Details for issue of debentures in electronic/ dematerialised form not given

PAN not mentioned in appropriate place

In case of applications under Power of Attorney by limited companies, corporate bodies, etc. relevant documents not submitted

In the event that the number of Debentures applied for are not allotted in full, the excess application money of such applicant will be refunded, as may be permitted.

Settlement Process Upon final allocation by the Issuer, the Issuer or the Registrar on behalf of the Issue shall instruct the depositories within 1 (one) day of the Date of Subscription, and the Depositories shall accordingly credit the allocated Debentures to the demat account of the successful bidder(s). Within 2 (two) days of the Date of Subscription, the Depositories shall confirm to clearing corporation of BSE for the transfer of debentures in the demat account(s) of the successful bidder(s). Post-Allocation Disclosures by the EBP Upon final allocation by the Issuer, the Issuer shall disclose the Issue Size, coupon rate, ISIN, number of successful bidders, category of the successful bidder(s), etc., in accordance with the SEBI EBP Circular. The EBP shall upload such data, as provided by the Issuer, on its websiteto make it available to the public. All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable and as amended from time to time.

105

XIV. CREDIT RATING FOR THE BONDS CARE Ratings Limited (“CARE”) has vide its revalidation of credit rating letter dated March 31, 2020 assigned the credit rating of “CARE AAA; Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CARE is enclosed elsewhere in this Series-I IM. CRISIL Limited (“CRISIL”) has vide its revalidation of credit rating letter dated April 2, 2020, assigned a credit rating of “CRISIL AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CRISIL is enclosed elsewhere in this Series-I IM. India Ratings and Research Private Limited (“IRRPL”) has vide revalidation of credit rating its letter dated April 1, 2020, assigned a credit rating of “IND AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from IRRPL is enclosed elsewhere in this Series-I IM. ICRA Limited (“ICRA”) has vide revalidation of credit rating its letter dated April 1, 2020, assigned a credit rating of "[ICRA] AAA” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from IRRPL is enclosed elsewhere in this Series-IIM. Other than the credit ratings mentioned hereinabove, NHAI has not sought any other credit rating from any other credit rating agency(ies) for the Bonds offered for subscription under the terms of this Series-I IM. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc.

106

XV. TRUSTEES FOR THE BONDHOLDERS

The Issuer has appointed IDBI Trusteeship Services Limited to act as trustee for the Debenture Holder(s). The address and contact details of the Trustees are as under:

IDBI Trusteeship Services Limited Asian Building, Ground Floor

17. R. Kamani Marg Ballard Estate Mumbai – 400 001

Phone: 022 40807000 Fax: 022 66311776

Email: [email protected]

A copy of letter from IDBI Trusteeship Services Limited conveying their consent to act as Trustees for the issue of Bonds is enclosed elsewhere in this Series-I IM. The Issuer hereby undertakes that a Debenture/ Bond Trust Deedinter alia, specifying the powers, authorities and obligations of the Debenture Trustee and the Issuer has been executed in favour of the Trustees within permissible time frame as per statutory laws. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of its agents or authorised officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture Trustee may in its absolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s).Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s) shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the repayment of the principal and yield thereon and the Debenture Trustee will take necessary action, subject to and in accordance with the Debenture Trust Deed, at the cost of the Issuer. The Debenture Trust Deed shall more specifically set out the rights and remedies of the Debenture Holder and the manner of enforcement thereof. The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trusteesshall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture/ Bond Trusteeship Agreement, the Debenture/ Bond Trust Deed, Series- I IM and all other related transaction documents, with due care, diligence and loyalty. The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Issuer in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all material events on an on-going basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds.


107

XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of BSE. The Issuer has obtained BSE in-principle approval for listing of Bonds offered under the terms of this Series- I IM. The Issuer shall make listing application to BSE and seek listing permission within 15 days of Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.

108

XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER

By very nature of its business, the Issuer is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Issuer. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Issuer) which are or may be deemed to be material have been entered into by the Issuer. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the head office of the Issuer between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

A. MATERIAL CONTRACTS

a. Copy of letter appointing Registrar; b. Copy of letter appointing Trustees to the Bondholders.

B. DOCUMENTS

a. The National Highways Authority of India Act, 1988, as amended. b. Board Resolution dated March 20, 2020 authorizing issue of Bonds. c. Letter of consent from the Trustees for acting as trustees for and on behalf of

the holder(s) of the Bonds. d. Letter of consent from the Registrars for acting as Registrars to the Issue. e. Application made to the BSE for grant of in-principle approval for listing of

Bonds. f. Letter from BSE conveying their in-principle approval for listing of Bonds. g. Letter from CRISIL conveying the credit rating for the Bonds. h. Letter from CARE conveying the credit rating for the Bonds. i. Letter from IRRPL conveying the credit rating for the Bonds. j. Letter from ICRA conveying the credit rating for the Bonds. k. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of

Bonds in dematerialised form. l. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of

Bonds in dematerialised form.

109

DECLARATION The Issuer undertakes that this Disclosure Document contains full disclosures in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD/NRO/GN/2008/13/127878 dated June 6, 2008, amended from time to time. The Issuer also confirms that to the best of its knowledge and beliefs this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made misleading. The Disclosure Document also does not contain any false or misleading statement. The issuer accepts no responsibility for the statement made otherwise than in the Disclosure Document or in any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at his own risk. Signed pursuant to internal authority granted: For National Highways Authority of India

(S.Q. Ahmad) General Manager (Finance) Place: New Delhi Date: 27.04.2020

ANNEXURE – 1 FINANCIAL INFORMATION

ABRIDGED FINANCIAL INFORMATION

REFORMATTED STATEMENT OF ASSETS AND LIABILITIES (Rs in lakhs)

SL. Nos.

Particulars Schedule AS AT MARCH 31

2017 2016 2015

(1) (2) (3) (4) (5)

I.

SOURCES OF FUNDS

1

Shareholders' Fund

a) Capital 1 13,959,380.47 12,551,457.89 10,452,040.18

b) Reserves & Surplus 2 0.00 748.68 45.46

2

Grants

a) Capital 3 1,365,643.01 1,366,280.32 1,366,901.41

3 Borrowings 4 7,538,464.71 4,527,036.70 2,489,285.59

TOTAL 22,863,488.18 18,445,523.58 14,308,272.64

II.

APPLICATION OF FUNDS

1

Fixed Assets 5

a) Gross Block 12,533.36 11,870.62 11,238.39

b) Less: Depreciation 7,857.39 7,217.40 6,462.96

c) Net Block 4,675.97 4,653.21 4,775.43

d) Less: Assets created out of

Grants

612.58 612.58 612.58

e) Assets held on behalf of GOI (Completed & ongoing)

21,772,656.62 17,645,402.50 14,079,731.46

Total 21,776,720.00 17,649,443.14 14,083,894.32

2 Investment (At cost) 6 90,959.00 121,652.89 121,625.00 3

Current Assets, Loans and Advance

7

a) Inventories - -

b) Sundry Debtors - -

c) Deposits, Loans &

Advances

3,295,320.19 2,577,831.04 1,426,624.21

d) Interest accrued on deposit 1,399.71 2,826.98 4,402.19

e) Interest accrued and due on CALA deposits

52,628.05 59,569.52

34,975.69

f) Cash & Bank Balance 837,680.26 674,079.72 267,235.23

sub total 4,187,028.21 3,314,307.25 1,733,237.32

Less: Current Liabilities and Provisions

a) Liabilities 8 3,187,098.88 2,636,198.49 1,627,412.69

b) Provisions 9 4,120.15 3,681.20 3,071.31

SL. Nos.

Particulars Schedule AS AT MARCH 31

2017 2016 2015

(1) (2) (3) (4) (5)

sub total 3,191,219.03 2,639,879.69 1,630,484.00

Net Current Assets 995,809.18 674,427.56 102,753.32 4 Misc. Expenditure (to the

extent not written off) 10

- - -

5 Profit & Loss Account (Debit balance, if any)

- - -

6 Significant Accounting Policies 18

- - -

7 Notes on Accounts 19 - - -

TOTAL 22,863,488.18 18,445,523.58 14,308,272.64

REFORMATTED STATEMENT OF PROFIT AND LOSS ACCOUNT

(Rs In Lacs)

Sl.Nos. Particulars Schedule

FOR THE YEAR ENDED MARCH 31

2017 2016

2015

(1) (2) (3) (4) (5)

I. INCOME

a) Value of Work done - - -

b) Other income 11 1,353.35 1,293.36 1,694.84

c) Interest (Gross) 12 1.06 0.88 1.18

d) Grant-in-aid for

maintenance of Highways - -

e) Net Increase/Decrease in work-in-progress (+)/(-)

13 - - -

TOTAL INCOME 1,354.40 1,294.24 1,696.01

II. EXPENDITURE

a) Construction Stores/ Material consumed Other stores, spares & tools etc. consumed

- -

Work Expenses: 14 - -

-

a) Personnel &

Administrative Expenses 15 27,282.06 22,537.20 20,799.86

b) Finance Charges 16 14.71 7.76 7.18

c) Depreciation 771.52 870.43 683.27

d) Assets of Small Value

Charged Off 22.01 21.50 16.83

Exceptional Item

Provision for diminution in the value of investment

40,310.88 -

Less: Provision transferred to capital (Sch-1)

(40310.88) -

TOTAL EXPENDITURE 28,090.3 23,436.89 21,507.14

Profit (+)/Loss (-) for the year (26,735.89) (22,142.65) (19,811.00)

Add: Prior Period Items net(+/-) 17 (1135.83) (747.01) (832.30)

Less: Net Establishment Expenses for the year transferred to CWIP (Sch-5)

27,871.73 22,889.66 20,643.43

Less/Add: Provision for Taxation - -

-

Net Profit

- -

-

Less: Transfer to Capital Reserve

- - -

Less: Transfer to other specific Reserve/Fund

- - -

Less/Add: Transfer to/Transfer from General Reserve (+/-)

- - -

Less/Add: Surplus brought forward from previous year

- - -

Surplus carried to Balance Sheet

- - -

REFORMATTED STATEMENT OF CASH FLOW

(Rs. in lakhs)

SL.Nos. Particulars

FOR THE YEAR ENDED MARCH 31

2017 2016 2015 (1) (3) (4) (5)

A. Cash flow from operating activities:

Net profit before tax (26,735.89) (22,142.65) (19,811.13)

Adjustments for:

Depreciation 771.52 870.43 683.27

Profit/(Loss )on sale of assets (2.77) (3.55) (8.33)

Interest income (1.06) (0.88) (1.18)

Operating profit before working capital changes

(25,968.20) (21,276.65) (19,137.36)

Adjustments for:

(Increase)/Decrease in Deposits, Loans & Advances

(717,489.15) (1,151,472.74) (427,786.46)

Increase in liabilities 550,900.39 1,008,785.80 321,133.65

Increase in Provision for gratuity and Leave encashment

438.95 609.89 673.60

Cash flow before extraordinary item & prior period items

(192,118.01) (163,353.7) (125,116.57)

Prior period items (1135.83) (747.01) (832.30)

Net cash generated from operating activities

(193,253.85) (164,110.71) (125,948.87)

B. Cash flow from investing activities:

Purchase of fixed assets (803.66) (757.79) (1905.46)

Realization from sale of assets 12.16 13.13 25.25

Increase in Capital Work in progress (3,866,631.06) (3,450,701.69) (1,698,326.15)

Increase in investment (9617.00) (27.88) (722.12)

Interest Income 162,085.61 96,759.82 110,727.53

Capital Reserve (Receipts) 20,349.00 11,188.98 10,769.86

Interest and other expenditure on 54EC - (222,770.32) (1,178,087.42)

Net cash used in investing activities (3,694,604.95) (3,566,295.75) (1,757,518.50)

C. Cash flow from financing activities:

Cess funds received from Govt of India

232,650.00 1,542,000.00 688,589.00

Capital additional budgetary receipts 564,902.00 37,027.00 60,000.00

SL.Nos. Particulars

FOR THE YEAR ENDED MARCH 31 2017 2016 2015

(1) (3) (4) (5)

EAP Grant utilized towards revenue expenditure

(637.31) (621.09) (445.03)

Transfer of ” Premium on bonds” to

“Capital Reserve” (748.68) - -

Adjusted Plough back of Toll Remittance, etc

650,681.46 520,390.71 433,072.96

Net decrease in loan from ADBdue to exchange loss after adjustment of pre payments

(6,133.29) (159.09) (683.98)

Proceeds from issue of 54 EC Capital Gains Tax Free Bonds

557,274.20 428,117.00 334,340.40

Proceeds from issue of Tax Free Bonds 2015-16, including premium

- 1,900,703.22 -

Proceeds from issue of Taxable Bonds 2,754,500.00 - -

Redemption of Capital Gains Tax Free Bonds

(294,212.90) (290,206.80) (251,151.50)

Interest and other expenditure on Bonds

(406,816.15)

Net cash used in financing activities 4,051,459.33 4,137,250.94 1,263,721.84

Net increase/(decrease) in cash and cash equivalents

203,911.43 406,844.49 (619,745.53)

Opening cash and cash equivalents 674,079.72 267,235.23 886,980.76

Closing cash and cash equivalents 877,991.14 674,079.72 267,235.23

Notes:

Cash and cash equivalents include:

Cash and cheques in hand / in transit 114.81 4.39 38.57

Balance with banks: -In Current Account

811,682.59 73,702.27 98,690.56

- In FD account 25,882.86 600,372.95 168,506.10

Balance as per books of account 837,680.26 674,079.72 267,235.23

NATION BUILDING THROUGH HIGHWAYS

NATIONAL HIGHWAYS AUTHORITY OF INDIAG-5 & 6, Sector-10, Dwarka, New Delhi - 110 075

BALANCE SHEET AS AT 31st MARCH, 2018

CURRENT YEAR?In Lakhs

PARTICULARS SCHEDULE PREVIOUS YEAR? In Lakhs

SOURCES OF FUNDS

Shareholders' Funda) Capitalb) Reserves & Surplus

Grantsa) Capital

Borrowings

I.

112

23

3 4

TOTAL

APPLICATION OF FUNDS

Fixed Assets

a) Gross Blockb) Less: Assets created out of Grantc) Assets out of Own Fundd) Less: Depreciatione) Net Blockf) Assets held on behalf of Gol

(completed & ongoing)

TOTAL

Investment

Current Assets, Loans and Advancea) Inventoriesb) Deposits, Loans & Advancesc) Interest accrued but not due on

depositsd) Interest accrued and due on

CALA depositse) Cash & Bank Balancef) Inter Unit Accountsub totalLess: Current Liabilities andProvisionsa) Liabilitiesb) Reserves & Provisions

II.

1 5

2 6

3 7

89

sub totalNet Current Assets

Misc. Expenditure

(to the extent not written off)

Profit & Loss Account(Debit balance if any)

4 10

5

TOTAL

1,63,77,926.38

13,83,29.45

1,22,52,415.96

3,00,13,571.79

16,163.18 612.58 15,550.60 8,804.24 6,746.36

28,564,371.53

2,85,71,117.89

93,617.34

50,73,832.44 4,326.74

8,069.98

4,03,795.66 0.00 54,90,024.83

41,36,257.50 4,930.77

41,41,188.27 13,48,836.56

3,00,13,571.79

1,39,59,380.47

1,3,65,643.01

75,38,464.71

2,28,63,488.18

12,533.36 612.58 11,920.77 7,857.39 4,063.38

21,772,656.62

2,17,76,720.00

90,959.00

32,95,320.19 1,399.71

52,628.05

8,37,680.26

41,87,028.21

31,87,098.88 4,120.15

31,91,219.03 9,95,809.18

2,28,63,488.18Significant Accounting Policy (Schedule 18) and Notes on Accounts (Schedule 19) are integral part of this FinancialStatements.

For and on behalf of the Board of the Authority

Place: New DelhiDate: 31.07.2018 Member (Finance) Chairman

Ell NATIONAL HIGHWAYS AUTHORITY OF INDIA

bbupadhay

Textbox

13,65,643.01


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2018

PARTICULARS SCHEDULE CURRENT YEAR? In Lakhs

PREVIOUS YEAR?In Lakhs

I. INCOME

a) Value of Work doneb) Other incomec) Interest (Gross)d) Net Increase/Decrease in

Work-in-progress (+)/(-)

11 1,381.89 1,353.3512 0.41 1.0613

TOTAL INCOME 1,382.30 1,354.40

II. EXPENDITURE

a) Construction Stores/Materialconsumed Other stores,spares &tools etc. consumed

Work ExpensesPersonnel & Administrative ExpensesFinance ChargesDepreciationAssets of Small Value Charged Off

1415 38,230.45 27,282.06

14.71771.52

22.01

16 8.361,027.75

36.96

Exceptional ItemProvision for diminution in the valueof investmentLess: Provision transferred to Capital(Sch-1)

40,310.88

(40,310.88)

TOTAL EXPENDITURE 39,303.52 28,090.30

Profit / (Loss ) for the period (37,921.22) (26,735.89)

Add: Prior Period Items net(+/-)(details to be given)

(1,305.05) (1,135.83)17

Transfer of Net EstablishmentExpenses for the year to Sch-5

39,226.27 27,871.73

Less/Add: Provision for Taxation

Net Profit

Less: Transfer to Capital Reserve

Less: Transfer to other specificReserve/Fund

Less/Add: Transfer to/Transfer fromGeneral Reserve (+/-)

Less/Add: Surplus brought forwardfrom previous year

Surplus carried to Balance Sheet


(—f


ANNUAL REPORT 2017-18 |

NATION BUILDING THROUGH HIGHWAYS


CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2018

CURRENT YEAR? In Lakhs

PREVIOUS YEAR? In Lakhs

Cash flow from operating activities:Net profit before tax

Adjustments for:DepreciationProfit/Loss on sale of assetsInterest income

Operating profit before working capital changesAdjustments for:(Increasej/Decrease in Deposits, Loans & Advanceslncrease/(Decrease) in liabilities(Increasej/Decrease in Provision for Gratuity andLeave EncashmentCash flow before extraordinary item & prior period itemsPrior period itemsNet cash generated from operating activities

Cash flow from investing activities:Purchase of fixed assetsRealisation from sale of assets(Increasej/Decrease in Capital Work in progress(Increasej/Decrease in investmentInterest IncomeCapital Reserve (Receipts)

Net cash used in investing activities

Cash flow from financing activities:Cess funds received from Govt of IndiaCapital additional budgetary receiptsEAP Grant Received & utilised towards RevenueExpenditureTransfer of "Premium on Bonds" to "Capital Reserve"Adjusted Plough back of Toll Remittance,etcNet decrease in loan from ADB due to Exchange Loss afterAdjustment of RepaymentsProceeds from issue of 54EC Capital Gains Tax-Free BondsProceeds from issue of Taxable bonds, Masala Bonds& NSSF Loan 2017-18Redemption of Capital Gains Tax- Free BondsInterest and other expenditure on Bond

Net cash generated from financing activities

A.(37,921.22) (26,735.89)

1,027.75(3.20)(0.41)

(36,897.08)

771.52(2.77)(1.06)

(25,968.20)

(17,78,512.25)9,49,158.62

810.61

(7,17,489.15)5,50,900.39

438.95

(8,65,440.09)(1,305.05)

(8,66,745.14)

(1,92,118.01)(1,135.83)

(1,93,253.85)

B(3,713.53) (803.66)

12.16(38,66,631.06)

(9,617.00)1,62,085.61

20,349.00

(36,94,604.95)

6.00(62,79,050.43)

(2,658.34)2,24,294.28

32,922.86

(60,28,199.16)

C.12,42,945.00

4,15,000.0017,586.44

2,32,650.005,64,902.00

(637.31)

(748.68)6,50,681.46

(6,133.29)7,60,600.92

(4,949.65)

6,65,741.3043,87,500.00

5,57,274.2027,54,500.00

(3,34,340.40)(6,89,023.91)

64,61,059.69

(2,94,212.90)(4,06,816.15)

40,51,459.33

Net increase/(decrease) in cash and cash equivalents(A+B+C)

(4,33,884.60) 1,63,600.54

Opening cash and cash equivalents 8,37,680.26 6,74,079.72

Closing cash and cash equivalents 4,03,795.66 8,37,680.26

Notes:Cash and cash equivalents include:Cash and cheques in hand / in transitBalance with banks-Current AccountBalance with banks-Savings Bank AccountBalance with banks-Fixed Deposit Account

1.10 114.816,08,310.772,03,371.82

25,882.86

90,400.982,78,858.78

34,534.80

Balance as per books of account 4,03,795.66 8,37,680.26



9| NATIONAL HIGHWAYS AUTHORITY OF INDIA

ANNEXURE – 2 CREDIT RATE LETTERS

CARE Ratings Ltd. CORPORATE OFFICE: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai - 400 022. Tel.: +91-22- 6754 3456 Fax: +91-22- 022 6754 3457 Email: [email protected] www.careratings.com

13th Floor, E-1 Block, Videocon Tower Jhandewalan Extension, New Delhi - 110 055.

Tel: +91-11-4533 3200 Fax: +91-11-4533 3238

CIN-L67190MH1993PLC071691

CARE/DRO/RL-2019-20/4009 Mr. Madhup Kumar Chief General Manager (Finance) National Highways Authority of India G-5 & 6, Sector – 10, Dwarka, New Delhi – 110 045

March 31, 2020

Confidential

Dear Sir,

Credit rating for bank facilities

On the basis of recent developments including operational and financial performance of your

company for FY18 (audited) and FY19 (Unaudited) and H1FY20 (unaudited), our Rating Committee

has reviewed the following ratings:

Instrument Amount

(Rs. crore) Rating1 Rating Action

Long-term Borrowing Programme for FY20-21

65,000 (Rupees Sixty five thousand

crore only)

CARE AAA; Stable (Triple A; Outlook: Stable)

Assigned

2. Refer Annexure 1 for details of rated facilities.

3. The rationale for the rating will be communicated to you separately. A write-up (press

release) on the above rating is proposed to be issued to the press shortly, a draft of

which is enclosed for your perusal as Annexure-2. We request you to peruse the

annexed document and offer your comments if any. We are doing this as a matter of

courtesy to our clients and with a view to ensure that no factual inaccuracies have

1Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE publications.

http://www.careratings.com/

CARE Ratings Ltd.

13th Floor, E-1 Block, Videocon Tower, Jhandewalan Extension, New Delhi - 110 055. Tel: +91-11-4533 3200 Fax: +91-11-4533 3238

inadvertently crept in. Kindly revert as early as possible. In any case, if we do not hear

from you by April 03, 2020, we will proceed on the basis that you have no any comments

to offer.

4. CARE reserves the right to undertake a surveillance/review of the rating from time to

time, based on circumstances warranting such review, subject to at least one such

review/surveillance every year.

5. CARE reserves the right to revise/reaffirm/withdraw the rating assigned as also revise

the outlook, as a result of periodic review/surveillance, based on any event or

information which in the opinion of CARE warrants such an action. In the event of failure

on the part of the entity to furnish such information, material or clarifications as may be

required by CARE so as to enable it to carry out continuous monitoring of the rating of

the bank facilities, CARE shall carry out the review on the basis of best available

information throughout the life time of such bank facilities. In such cases the credit

rating symbol shall be accompanied by “ISSUER NOT COOPERATING”. CARE shall also be

entitled to publicize/disseminate all the afore-mentioned rating actions in any manner

considered appropriate by it, without reference to you.

6. CARE ratings do not take into account the sovereign risk, if any, attached to the foreign

currency loans, and the ratings are applicable only to the rupee equivalent of these

loans.

7. Our ratings do not factor in any rating related trigger clauses as per the terms of the

facility/instrument, which may involve acceleration of payments in case of rating

downgrades. However, if any such clauses are introduced and if triggered, the ratings

may see volatility and sharp downgrades.

8. Users of this rating may kindly refer our website www.careratings.com for latest update

on the outstanding rating.


CARE Ratings Ltd.


9. CARE ratings are not recommendations to sanction, renew, disburse or recall the

concerned bank facilities.

If you need any clarification, you are welcome to approach us in this regard.

Thanking you,

Yours faithfully,

[Nishtha Chugh] [Jasmeen Kaur] Deputy Manager Associate Director [email protected] [email protected]

Encl.: As above

Disclaimer

CARE’s ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not

recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE’s

ratings do not convey suitability or price for the investor. CARE’s ratings do not constitute an audit on the rated entity. CARE has

based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not,

however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or

omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are

rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. CARE or its

subsidiaries/associates may also have other commercial transactions with the entity. In case of partnership/proprietary

concerns, the rating /outlook assigned by CARE is, inter-alia, based on the capital deployed by the partners/proprietor and the

financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the

unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. CARE

is not responsible for any errors and states that it has no financial liability whatsoever to the users of CARE’s rating.

Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument, which may involve

acceleration of payments in case of rating downgrades. However, if any such clauses are introduced and if triggered, the ratings

may see volatility and sharp downgrades.



CARE Ratings Ltd.


Annexure 2

Press Release

National Highways Authority of India

Ratings

Instrument Amount

(Rs. crore) Rating2 Rating Action

Long-term Borrowing Programme for FY21

65,000 (Rupees Sixty five thousand

crore only)

CARE AAA; Stable (Triple A; Outlook: Stable)

Assigned

Detailed Rationale and key rating drivers

The ratings assigned to the long-term borrowing programme for FY21 of National Highways

Authority of India (NHAI) continue to take into account the high level of support that NHAI receives

from the Government of India (GoI) in the form of capital grants, allocation of cess funds and

additional budgetary support (ABS) due to its strategic importance as the country’s nodal agency for

implementing various road sector projects including various phases of the National Highways

Development Programme (NHDP) and the Bharatmala Project (BMP). NHAI was incorporated as an

autonomous body under the National Highways Authority of India Act, 1988 and the rating takes

into account the constitutional status imparting credit strength to the Authority.

Rating Sensitivities

Negative Factors

Any weakening in the financial, operational and managerial linkages with the GoI.

Detailed description of the key rating drivers

Key Rating Strengths

Support from the Government of India: With the Government of India (GoI) having a 100% stake in

NHAI, it receives continuous support from the GoI in the form of capital grants, allocation of cess

funds, additional budgetary support (ABS) and guarantees for its market borrowing programmes.

According to the latest audited financial figures available (for FY18), NHAI received Rs. 25,228 cr

from the GoI in FY18, comprising of Rs. 12,429 cr as cess funds, Rs. 4,150 as ABS and Rs. 186 cr as

capital grant) which is equivalent to 32% of the total expenditure incurred by the authority in FY18.

Strategic importance as the country’s nodal agency for road projects: NHAI is the nodal agency

responsible for the development and maintenance of national highways. NHAI is vested with

executive powers for developing national highways in India by the Ministry of Road Transport &

1Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE publications.


CARE Ratings Ltd.


Highways (MoRTH). The charter of NHAI is set out in the National Highways Act, 1956 and National

Highways Authority of India Act, 1988.

Current operational performance: During FY18, NHAI had awarded projects for a length of 7,396 km

(as against 4,335 km in FY17 and 4,368 km in FY16) and had completed a length of 3,071 km (as

against 2,628 in FY17 and 1,998 in FY16). In FY19, NHAI had an award target of 6,000 km out of

which it awarded around 2500 km and completed around 3,320 km during the year. Though the

pace of award slowed down in FY 19, the pace of execution improved in FY 19 compared to FY 18.

Strong financial flexibility: During FY18, NHAI was allocated cess funds of Rs.12,429 crore

(compared with Rs. 2,327 cr in FY17 and Rs. 15,420 crore in FY16) out of the Central Road Fund

(CRF). In addition to cess funds, NHAI receives funds from the GoI by way of additional budgetary

support for the development of national highways, and by way of grants and loans for execution of

externally aided projects. The tangible net worth increased by 16% (y-o-y) to Rs.1, 77,611 crore as

on March 31, 2018. This has further gone up by 8.60% to Rs. 1, 92,860 crore as on March 31, 2019

(unaudited), on account of additional cess funds/budgetary support from the government.

In the aftermath of the worldwide COVID-19 pandemic, in March 2020, the Indian government has

declared a nationwide shutdown. Further, Ministry of Road Transport and Highways vide its circular

dated March 25, 2020 directed NHAI to suspended toll collections. This can be treated as force

majeure by the toll operators who may file for claims from NHAI thereby increasing its immediate

liability.

Industry and Prospects: The prospects of NHAI and its continued status as the nodal agency for

highway development is likely to continue to be governed by the support extended by the GoI in the

form of funds infusion and budgetary support for the progress of the Bharatmala Project (BMP) as

envisaged. The continued support of GoI and MORTH would be more important in light of the

enhanced debt levels of the authority and the sizeable investment plans under BMP that would

require enhanced funding support in the medium term. The Government thrust on infrastructure

development in the country, as particularly evident from its recently-unveiled National Investment

Pipeline (NIP) comprising of Rs 102 cr of infrastructure projects, augurs well for the long term

prospects of NHAI.

Liquidity: NHAI receives continuous support from GoI in the form of capital grants, allocation of cess

funds and additional budgetary support (ABS). In addition, the authority raises funds from the

market through capital gain bonds, taxable bonds and loans. On account of NHAI’s increased focus

on EPC- and Hybrid Annuity Model (HAM)-based projects and the rising land acquisition cost, its

dependence on borrowed funds has increased over the years. Consequently, funding requirement

for debt servicing has steadily increased on account of rising debt. Going forward, the success of

proposed InvITs and TOTs and continued GoI funding support would be critical for sustenance of

NHAI’s credit outlook.

As on 31st March 2018, NHAI had a cash balance of Rs. 4,037.96 cr, as against Rs. 8,376.80 cr at the

end of the previous year. Nonetheless, considering the strategic importance of NHAI as the nodal

CARE Ratings Ltd.


agency for road projects, CARE expects adequate support to the authority from the GoI in case of

any liquidity mismatch.

Analytical approach: Standalone while suitably factoring in NHAI’s sovereign ownership and the its

strategic importance for the GoI.

Applicable Criteria

Criteria on assigning Rating Outlook and Credit Watch CARE's Policy on Default Recognition Financial Ratios – Non-Financial Sector Rating Methodology-Consolidation Factoring Linkages in Ratings Rating Methodology - Infrastructure Sector Ratings

About the Company

National Highway Authority of India (NHAI) was constituted under Section 3(1) of the National

Highways Authority of India Act, 1988 and commenced operations in February 1995 to develop,

maintain and manage national highways in the country. NHAI is vested with executive powers for

developing national highways in India by the Ministry of Road Transport & Highways (MoRTH). The

mission of NHAI is to meet the nation’s need for the provision and maintenance of national highway

networks to world standards within the strategic policy framework set by the Government of India

(GoI). NHAI has a well-defined organization structure and is managed by Board Members (whole-

time and part-time). The NHAI Board is currently headed by Mr Sukhbir Singh Sandhu, who was

appointed as Chairman of NHAI in March 2019. In addition, the Board has experienced full-time

members individually looking after the functions of finance, technical and administration.

According to latest information available, NHAI has awarded projects for a length 7,396 km in FY18

(as against 4,335 km in FY17 and 4,368 km in FY16)

Brief Financials (Rs. crore) FY17 (Audited) FY18 (Audited)

Total operating income 13.54 13.82

PBILDT -259.50 -368.57

PAT -267 -392

Overall Gearing 0.49 0.69

Interest Coverage NM NM

Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not Applicable

Rating History (Last three years): Please refer Annexure-2

http://www.careratings.com/pdf/resources/Rating_Outlook_and_credit_watch_May_2019.pdf

http://www.careratings.com/pdf/resources/CARE'sPolicyOnDefaultRecognition-30July2018.pdf

http://www.careratings.com/pdf/resources/Financialratios-NonFinancialSector27june2017.pdf

http://www.careratings.com/upload/NewsFiles/GetRated/Rating%20Methodology%20-%20Consolidation%20&%20Factoring%20Linkages%20in%20Ratings-Oct-19.pdf

http://www.careratings.com/upload/NewsFiles/GetRated/Rating%20methodology%20-%20Infrastructure%20Sector%20Ratings_Jan2020.pdf

CARE Ratings Ltd.


Annexure-1: Details of Instruments/Facilities

Name of the Instrument

Date of Issuance

Coupon Rate

Maturity Date

Size of the Issue (Rs. crore)

Rating assigned along with

Rating Outlook Borrowings-Market Borrowing Programme

Up to March 31, 2021

Proposed Proposed 65000.00 CARE AAA; Stable

Annexure-2: Rating History of last three years Sr. No.

Name of the Instrument/Bank

Facilities

Current Ratings Rating history

Type

Amount Outstanding (Rs. crore)

Rating

Date(s) & Rating(s)

assigned in 2019-2020

Date(s) & Rating(s)


Date(s) & Rating(s)


Date(s) & Rating(s)


1. Bonds LT 10000.00 CARE AAA; Stable

1)CARE AAA; Stable (09-Oct-19)

1)CARE AAA; Stable (03-Oct-18) 2)CARE AAA; Stable (02-Apr-18)

1)CARE AAA; Stable (25-Apr-17)

1)CARE AAA (13-May-16)











4. Borrowings-Market Borrowing Programme

LT 33118.00 CARE AAA; Stable




1)CARE AAA; Stable (30-Dec-16) 2)CARE AAA (29-Jun-16) 3)CARE AAA (13-May-16)

5. Commercial Paper ST - - - - 1)Withdrawn (25-Apr-17)

1)CARE A1+ (30-Dec-16) 2)CARE A1+ (29-Jun-16)






-




1)CARE AAA; Stable (03-Oct-18) 2)CARE

- -

CARE Ratings Ltd.


AAA; Stable (02-Apr-18)




- - -



- - - -

CARE Ratings Ltd.


Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This

classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to

[email protected] for any clarifications.

Contact us

Media Contact Mradul Mishra Contact no. – +91-22-6837 4424 Email ID – [email protected]

Analyst Contact Group Head Name – Ms Jasmeen Kaur Group Head Contact no. - +91-11-4533 3245 Group Head Email ID- [email protected]

Relationship Contact Name: Ms. Swati Agrawal Contact no. : +91-11-2433 3200 Email ID: [email protected]

About CARE Ratings:

CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit

rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an

External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the

Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the

corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based

on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and

analytical expertise backed by the methodologies congruent with the international best practices.

Disclaimer

CARE’s ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not

recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE’s

ratings do not convey suitability or price for the investor. CARE’s ratings do not constitute an audit on the rated entity. CARE has based

its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however,

guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the

results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a

credit rating fee, based on the amount and type of bank facilities/instruments. CARE or its subsidiaries/associates may also have other

commercial transactions with the entity. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is, inter-

alia, based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook

may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the

financial performance and other relevant factors. CARE is not responsible for any errors and states that it has no financial liability

whatsoever to the users of CARE’s rating.

Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument, which may involve

acceleration of payments in case of rating downgrades. However, if any such clauses are introduced and if triggered, the ratings may

see volatility and sharp downgrades.

**For detailed Rationale Report and subscription information, please contact us at www.careratings.com

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Rating RationaleMarch 31, 2020 | Mumbai

National Highways Authority of India'CRISIL AAA/Stable' assigned to long-term borrowing programme

Rating ActionRs 65000 Crore Long-Term Borrowing Programme% CRISIL AAA/Stable (Assigned)

Rs.75000 Crore Long-Term Borrowing Programme@ CRISIL AAA/Stable (Reaffirmed)

Rs.33118 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Reaffirmed)

Rs.61216.74 Crore Long-Term BorrowingProgramme CRISIL AAA/Stable (Reaffirmed)

Rs.47532.41 Crore Long-Term BorrowingProgramme CRISIL AAA/Stable (Reaffirmed)

Rs.3783.26 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Withdrawn)

Rs.10000 Crore Tax Free Bond CRISIL AAA/Stable (Reaffirmed)

Rs.500 Crore Tax Free Bond CRISIL AAA/Stable (Reaffirmed)

Rs.19000 Crore Tax Free Bond CRISIL AAA/Stable (Reaffirmed)1 crore = 10 millionRefer to annexure for Details of Instruments & Bank Facilities**Rs 27545 crore transferred from Tax Free Bonds%Through different modes including public issue of Bharatmala Bonds

Detailed RationaleCRISIL has assigned its 'CRISIL AAA/Stable' rating on the long-term borrowing programme of Rs 65000 crore andreaffirmed its 'CRISIL AAA/Stable' rating on the tax-free bonds and long-term borrowing programme of NationalHighways Authority of India (NHAI). CRISIL has also withdrawn its rating on Rs 3783.26 crore long-term borrowingprogramme at NHAI's request as this facility was not availed. The rating action is in line with CRISIL's withdrawalpolicy. The rating continues to reflect NHAI's strategic importance to the Government of India (GoI), and its strong financialflexibility driven by continued support from the government. These strengths are partially offset by increasingindebtedness.

Analytical ApproachThe rating on NHAI factors in support from GoI. CRISIL believes NHAI will receive distress support from GoI fortimely repayment of debt and interest servicing, considering the entity's strategic role in implementation of thenation's road sector programmes.

1

Key Rating Drivers & Detailed DescriptionStrengths:* Strategic importance to GOINHAI, constituted by an act of Parliament, is the nodal agency for implementing the road programmes for thegovernment. GoI has identified road sector reforms as a key area for removing infrastructure bottlenecks and providemomentum to the economic growth. NHAI is thereby entrusted with implementation of the Bharatmala programmewhich aims to construct 34,800-km of roads between fiscals 2018 and 2022 at an estimated cost of Rs 5,35,000crore. National Highway Development Project (NHDP), worth over Rs 2,47,000 crore, which was helmed by NHAIwas one of the largest infrastructure projects in the country which has been merged with Bharatmala programme. * Strong financial flexibility, driven by continued support from GoINHAI has strong financial flexibility, predominantly because of continuous support from GoI for its projects, by way ofallocation of fuel cess funds and budgetary resources, as well as flexibility to raise funds through capital gains bondsand tax-free infrastructure bonds. NHAI received Rs 11,569 crore of the cess funds in fiscal 2019. Cess income till Dec 2019 was Rs 10,091 crorewhile borrowings for the period were Rs 47,226 crore. As per the revised budgetary allocation for fiscal 2020, cessallocation is expected to be around Rs 16,091 crore. NHAI also receives additional budgetary support for thedevelopment of national highways, and grants and loans for execution of externally aided projects. The fundsprovided by GoI are used for servicing debt and meeting capital and operational expenses. Although the quantum ofcess allocation and additional budgetary support increased in the past few fiscals, it remained lower than the budgetestimate. NHAI also receives project revenues i.e. ploughing back of funds from toll collection, negative grant, andrevenue sharing. Stability in budgetary support for meeting expenses will remain a key rating sensitivity factor. NHAI also has options to raise funds though monetising its operational assets ' first bundle of operational road assetswere monetised through the toll-operate-toll (TOT) model in fiscal 2018 which received strong response. Third bundlehas been awarded in fiscal 2020 after TOT 2 was cancelled due to low bid. NHAI also plans to raise funds throughInfrastructure Investment Trust (InvIT) mode which can reduce dependence on borrowings. NHAI is one of the four bodies authorised to float bonds that qualify for capital gains tax exemption under Section 54EC of the Income Tax Act, 1961. Furthermore, NHAI raised masala bonds in fiscal 2018 at a competitive coupon rateof around 7.3%, indicating that the entity is perceived to be a critical arm of GOI. * Increasing indebtednessNHAI's expenditure increased 36% over the past 6 fiscals. This, along with moderate allocation of cess towardsNHAI, has resulted in increased dependence on Internal and Extra Budgetary Resources (IEBR) to be arranged byNHAI and has thereby resulted in increase in its borrowings. Consequently, gearing increased to 0.97 time as on Sep30, 2019, from 0.21 times as on March 31, 2015. Bank borrowings increased to around 64% of total cash outflow infiscal 2019 from 14% in fiscal 2015. Dependence on debt is expected to continue on account of implementation ofthe Bharatmala programme. However, NHAI will continue to enjoy healthy financial flexibility on account of supportfrom the GoI in the form of cess allocation and additional budgetary support. Given increasing debt levels and debtobligations, timely infusion of funds by GoI for meeting debt servicing will remain a key rating sensitivity factor.

Liquidity SuperiorNHAI receives funds from GoI in the form of cess allocation, additional budgetary support, and plough back of tolland TOT (Toll-Operate-Transfer), and also raises funds from the market at competitive rates. Budgeted cess andadditional budgetary support from government will comfortably cover the debt servicing of Rs 26,700 crore in fiscal2021. NHAI had cash and bank balance of Rs 13,766 crore as on Dec 31, 2019. NHAI also has overdraft limits of Rs5000 crore sanctioned to meet exigencies in case of delay in receipt of cess funds. NHAI is an important arm of GoIfor implementation of road sector reforms, and CRISIL believes GoI will provide support to NHAI to meet debtobligation.

Outlook: StableCRISIL believes NHAI will continue to receive direct and indirect support from GoI for the implementation of roaddevelopment programmes.

2

Rating Sensitivity factorsDownward factors:* If there is any change in the road sector policy leading to dilution in NHAI's strategic importance to GoI.* If outstanding debt increases to more than Rs 4 lakh crore by March 31, 2023

About NHAINHAI, set up under the National Highways Authority of India Act, 1988, began operations in February 1995. It isresponsible for developing, maintaining, and managing national highways. NHAI is mandated to implement NHDPand Bharatmala, and is responsible for implementing other national highway projects, mainly those ensuringconnectivity with major ports. NHAI awards projects for development on an engineering-procurement-constructionand build-operate-transfer (BOT) toll and annuity basis, as well as projects on a BOT hybrid'annuity basis and also onTOT basis.

Key Financial IndicatorsAs on / for the period ended March 31 2019 2018Revenue Rs crore NA 14Profit after tax Rs crore NA 0PAT margin % NA -Adjusted Debt/Adjusted networth Times NA 0.69Interest coverage Times NA 284.5

NA: Not available yet (Annual report for fiscal 2019 is not yet released)

Any other information: Not applicable

Note on complexity levels of the rated instrument:CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels areavailable on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments thatthey consider for investment. Users may also call the Customer Service Helpdesk with queries on specificinstruments.

3

http://www.crisil.com/complexity-levels

Annexure - Details of Instrument(s)ISIN Name of instrument Date of

allotmentCouponrate (%)

Maturitydate

Issue size(Rs Crore) Rating

INE906B07CA1 Tax Free Bonds 25-Jan-12 8.20% 24-Jan-22 6714 CRISIL AAA/Stable

INE906B07CB9 Tax Free Bonds 25-Jan-12 8.30% 24-Jan-27 3286 CRISIL AAA/Stable

INE906B07DA9 Tax Free Bonds 22-Nov-13 8.35% 21-Nov-23 452 CRISIL AAA/Stable

INE906B07DB7 Tax Free Bonds 22-Nov-13 8.48% 21-Nov-28 850 CRISIL AAA/Stable

INE906B07DC5 Tax Free Bonds 5-Feb-14 8.27% 4-Feb-24 475 CRISIL AAA/Stable

INE906B07DD3 Tax Free Bonds 5-Feb-14 8.52% 4-Feb-24 301 CRISIL AAA/Stable

INE906B07DE1 Tax Free Bonds 5-Feb-14 8.50% 4-Feb-29 1732 CRISIL AAA/Stable

INE906B07DF8 Tax Free Bonds 5-Feb-14 8.75% 4-Feb-29 1190 CRISIL AAA/Stable

INE906B07EE9 Tax Free Bonds 18-Sep-15 7.11% 17-Sep-25 549 CRISIL AAA/Stable

INE906B07EF6 Tax Free Bonds 18-Sep-15 7.28% 17-Sep-30 3323 CRISIL AAA/Stable

INE906B07EG4 Tax Free Bonds 11-Jan-16 7.14% 10-Jan-26 686 CRISIL AAA/Stable

INE906B07EH2 Tax Free Bonds 11-Jan-16 7.39% 10-Jan-26 656 CRISIL AAA/Stable

INE906B07EI0 Tax Free Bonds 11-Jan-16 7.35% 10-Jan-31 5983 CRISIL AAA/Stable

INE906B07EJ8 Tax Free Bonds 11-Jan-16 7.60% 10-Jan-31 2675 CRISIL AAA/Stable

INE906B07EK6 Tax Free Bonds 18-Feb-16 7.02% 17-Feb-26 455 CRISIL AAA/Stable

INE906B07EL4 Tax Free Bonds 18-Feb-16 7.39% 17-Feb-31 1373 CRISIL AAA/Stable

INE906B07EM2 Tax Free Bonds 9-Mar-16 7.04% 8-Mar-26 98 CRISIL AAA/Stable

INE906B07EN0 Tax Free Bonds 9-Mar-16 7.29% 8-Mar-26 192 CRISIL AAA/Stable

INE906B07EO8 Tax Free Bonds 9-Mar-16 7.39% 8-Mar-31 1882 CRISIL AAA/Stable

INE906B07EP5 Tax Free Bonds 9-Mar-16 7.69% 8-Mar-31 1128 CRISIL AAA/Stable

INE906B07FB2 Taxable Bonds 2016-17 3-Aug-16 8.03% 3-Aug-41 5000 CRISIL AAA/Stable

INE906B07FD8 Taxable Bonds 2016-17 1-Sep-16 7.68% 30-Aug-41 5000 CRISIL AAA/Stable

INE906B07FE6 Taxable Bonds 2016-17 23-Dec-16 7.17% 23-Dec-21 5020 CRISIL AAA/Stable

INE906B07FF3 Taxable Bonds 2016-17 24-Jan-17 7.22% 24-Jan-47 8500 CRISIL AAA/Stable

INE906B07FG1 Taxable Bonds 2016-17 20-Mar-17 7.60% 18-Mar-22 4025 CRISIL AAA/Stable

INE906B07FT4 NHAI Taxable Bonds 6-Jun-17 7.27% 6-Jun-22 1525 CRISIL AAA/Stable

INE906B07FU2 NHAI Taxable Bonds 16-Jun-17 7.24% 16-Jun-47 5000 CRISIL AAA/Stable

INE906B07FV0 NHAI Taxable Bonds 14-Jul-17 7.14% 14-Jul-47 3500 CRISIL AAA/Stable

INE906B07FW8 NHAI Taxable Bonds 24-Aug-17 7.38% 24-Aug-38 5000 CRISIL AAA/Stable

INE906B07FX6 NHAI Taxable Bonds 6-Nov-17 7.11% 6-Nov-22 850 CRISIL AAA/Stable

INE906B08021 NHAI Taxable Bonds 22-Nov-17 7.64% 22-Nov-32 5000 CRISIL AAA/Stable

INE906B07GK1 Taxable Bonds 2018-19 28-Jun-18 8.55% 28-Jun-48 2195 CRISIL AAA/Stable

INE906B07GL9 Taxable Bonds 2018-19 2-Aug-18 8.45% 2-Aug-48 2060.2 CRISIL AAA/Stable

INE906B07GM7 Taxable Bonds 2018-19 21-Dec-18 8.19% 21-Dec-28 2055.2 CRISIL AAA/Stable

INE906B07GN5 Taxable Bonds 2018-19 21-Jan-19 8.37% 21-Jan-29 1675 CRISIL AAA/Stable

INE906B07GO3 Taxable Bonds 2018-19 5-Feb-19 8.50% 5-Feb-29 2000 CRISIL AAA/Stable

INE906B07GP0 Taxable Bonds 2018-19 28-Mar-19 8.27% 28-Mar-29 5500 CRISIL AAA/Stable

4

INE906B07GQ8 Taxable Bonds 2018-19 29-Mar-19 8.18% 29-Mar-49 2025 CRISIL AAA/Stable

INE906B07HD4 Taxable Bonds 2019-20 20-May-19 8.36% 20-May-29 4709 CRISIL AAA/Stable

INE906B07HE2 Taxable Bonds 2019-20 6-Jun-19 7.92% 2-Jun-29 3420 CRISIL AAA/Stable

INE906B07HF9 Taxable Bonds 2019-20 26-Jun-19 7.80% 26-Jun-29 3930 CRISIL AAA/Stable

INE906B07HG7 Taxable Bonds 2019-20 1-Aug-19 7.49% 1-Aug-29 4365 CRISIL AAA/StableINE906B07HH5 Taxable Bonds 2019-20 13-Sep-19 7.70% 13-Sep-29 4602 CRISIL AAA/Stable

INE906B07HI3 Taxable Bonds 2019-20 9-Dec-19 7.87% 9-Dec-34 3000 CRISIL AAA/Stable

INE906B07HJ1 Taxable Bonds 2019-20 23-Dec-19 7.98% 23-Dec-49 5000 CRISIL AAA/Stable

INE906B07HK9Taxable Bonds 2019-20

(ETF) 27-Jan-20 7.54% 27-Jan-30 1100 CRISIL AAA/Stable

INE906B07HL7 Taxable Bonds 2019-20 24-Feb-20 7.27% 24-Feb-35 5000 CRISIL AAA/Stable

INE906B07EQ354EC Capital Gain Tax

Exemption Bonds 30-Apr-16 6.00% 30-Apr-19 270 CRISIL AAA/Stable

INE906B07ER154EC Capital Gain Tax

Exemption Bonds 31-May-16 6.00% 31-May-19 367 CRISIL AAA/Stable

INE906B07ES954EC Capital Gain Tax

Exemption Bonds 30-Jun-16 6.00% 30-Jun-19 441 CRISIL AAA/Stable

INE906B07ET754EC Capital Gain Tax

Exemption Bonds 31-Jul-16 6.00% 31-Jul-19 521 CRISIL AAA/Stable

INE906B07EU554EC Capital Gain Tax

Exemption Bonds 31-Aug-16 6.00% 31-Aug-19 417 CRISIL AAA/Stable

INE906B07FC054EC Capital Gain Tax

Exemption Bonds 30-Sep-16 6.00% 30-Sep-19 455 CRISIL AAA/Stable

INE906B07EV354EC Capital Gain Tax

Exemption Bonds 31-Oct-16 6.00% 31-Oct-19 433 CRISIL AAA/Stable

INE906B07EW154EC Capital Gain Tax

Exemption Bonds 30-Nov-16 6.00% 30-Nov-19 566 CRISIL AAA/Stable

INE906B07EX954EC Capital Gain Tax

Exemption Bonds 31-Dec-16 5.25% 31-Dec-19 455 CRISIL AAA/Stable

INE906B07EY754EC Capital Gain Tax

Exemption Bonds 31-Jan-17 5.25% 31-Jan-20 392 CRISIL AAA/Stable

INE906B07EZ454EC Capital Gain Tax

Exemption Bonds 28-Feb-17 5.25% 28-Feb-20 376 CRISIL AAA/Stable

INE906B07FA454EC Capital Gain Tax

Exemption Bonds 31-Mar-17 5.25% 31-Mar-20 880 CRISIL AAA/Stable

INE906B07FH9 54EC Bonds -2017-18 30-Apr-17 5.25% 30-Apr-20 277.94 CRISIL AAA/Stable

INE906B07FI7 54EC Bonds -2017-18 31-May-17 5.25% 31-May-20 345.07 CRISIL AAA/Stable

INE906B07FJ5 54EC Bonds -2017-18 30-Jun-17 5.25% 30-Jun-20 379.11 CRISIL AAA/Stable

INE906B07FK3 54EC Bonds -2017-18 31-Jul-17 5.25% 31-Jul-20 515.3 CRISIL AAA/Stable

INE906B07FL1 54EC Bonds -2017-18 31-Aug-17 5.25% 31-Aug-20 418.72 CRISIL AAA/Stable

INE906B07FM9 54EC Bonds -2017-18 30-Sep-17 5.25% 30-Sep-20 470.06 CRISIL AAA/Stable

5

INE906B07FN7 54EC Bonds -2017-18 31-Oct-17 5.25% 31-Oct-20 456.99 CRISIL AAA/Stable

INE906B07FO5 54EC Bonds -2017-18 30-Nov-17 5.25% 30-Nov-20 508.7 CRISIL AAA/Stable

INE906B07FP2 54EC Bonds -2017-18 31-Dec-17 5.25% 30-Dec-20 544.02 CRISIL AAA/Stable

INE906B07FQ0 54EC Bonds -2017-18 31-Jan-18 5.25% 31-Jan-21 536.88 CRISIL AAA/Stable

INE906B07FR8 54EC Bonds -2017-18 28-Feb-18 5.25% 28-Feb-21 565.31 CRISIL AAA/Stable

INE906B07FS6 54EC Bonds -2017-18 31-Mar-18 5.25% 31-Mar-21 1639.31 CRISIL AAA/Stable

INE906B07FY4 54EC Bonds -2018-19 30-Apr-18 5.75% 30-Apr-23 153.52 CRISIL AAA/Stable

INE906B07FZ1 54EC Bonds -2018-19 31-May-18 5.75% 31-May-23 248.39 CRISIL AAA/Stable

INE906B07GA2 54EC Bonds -2018-19 30-Jun-18 5.75% 30-Jun-23 314.02 CRISIL AAA/Stable

INE906B07GB0 54EC Bonds -2018-19 31-Jul-18 5.75% 31-Jul-23 438.72 CRISIL AAA/Stable

INE906B07GC8 54EC Bonds -2018-19 31-Aug-18 5.75% 31-Aug-23 348.44 CRISIL AAA/Stable

INE906B07GD6 54EC Bonds -2018-19 30-Sep-18 5.75% 30-Sep-23 353.08 CRISIL AAA/Stable

INE906B07GE4 54EC Bonds -2018-19 31-Oct-18 5.75% 31-Oct-23 360.03 CRISIL AAA/Stable

INE906B07GF1 54EC Bonds -2018-19 30-Nov-18 5.75% 30-Nov-23 329.3 CRISIL AAA/Stable

INE906B07GG9 54EC Bonds -2018-19 31-Dec-18 5.75% 31-Dec-23 402.75 CRISIL AAA/Stable

INE906B07GH7 54EC Bonds -2018-19 31-Jan-19 5.75% 31-Jan-24 434.75 CRISIL AAA/Stable

INE906B07GI5 54EC Bonds -2018-19 28-Feb-19 5.75% 29-Feb-24 430.07 CRISIL AAA/Stable

INE906B07GJ3 54EC Bonds -2018-19 31-Mar-19 5.75% 31-Mar-24 893.27 CRISIL AAA/Stable

INE906B07GR6 54EC Bonds -2019-20 30-Apr-19 5.75% 30-Apr-24 282.11 CRISIL AAA/Stable

INE906B07GS4 54EC Bonds -2019-20 31-May-19 5.75% 31-May-24 375.89 CRISIL AAA/Stable

INE906B07GT2 54EC Bonds -2019-20 30-Jun-19 5.75% 30-Jun-24 345.05 CRISIL AAA/Stable

INE906B07GU0 54EC Bonds -2019-20 31-Jul-19 5.75% 31-Jul-24 472.20 CRISIL AAA/Stable

INE906B07GV8 54EC Bonds -2019-20 31-Aug-19 5.75% 31-Aug-24 372.26 CRISIL AAA/Stable

INE906B07GW6 54EC Bonds -2019-20 30-Sep-19 5.75% 30-Sep-24 311.21 CRISIL AAA/Stable

INE906B07GX4 54EC Bonds -2019-20 31-Oct-19 5.75% 31-Oct-24 341.56 CRISIL AAA/Stable

INE906B07GY2 54EC Bonds -2019-20 30-Nov-19 5.75% 30-Nov-24 348.88 CRISIL AAA/Stable

INE906B07GZ9 54EC Bonds -2019-20 31-Dec-19 5.75% 31-Dec-24 366.65 CRISIL AAA/Stable

INE906B07HB8 54EC Bonds -2019-20 31-Jan-20 5.75% 31-Jan-25 340.92 CRISIL AAA/Stable

NA*Long-term borrowing

programme# 17-Jan-18 NA* 17-Jan-28 10000 CRISIL AAA/Stable


programme# 7-Mar-18 NA* 7-Mar-28 10000 CRISIL AAA/Stable


programme# 7-Jun-18 NA* 7-Jun-28 5000 CRISIL AAA/Stable


programme# 28-Sep-18 NA* 28-Sep-28 5000 CRISIL AAA/Stable


programme# 31-Dec-18 NA* 31-Dec-28 5000 CRISIL AAA/Stable


programme# 11-Mar-19 NA* 11-Mar-29 5000 CRISIL AAA/Stable

6


programme# 17-Oct-19 NA* 17-Oct-29 10000 CRISIL AAA/Stable


programme# 3-Aug-18 NA* 31-Mar-29 5000 CRISIL AAA/Stable


programme# 11-Sep-18 NA* 31-Mar-29 2000 CRISIL AAA/Stable








programme# 30-Nov-18 NA* 31-Mar-29 1000 CRISIL AAA/Stable


programme# 4-Dec-18 NA* 31-Mar-29 1000 CRISIL AAA/Stable




programme# 11-Nov-18 NA* 31-Mar-29 1000 CRISIL AAA/Stable




programme# 16-Jan-19 NA* 31-Mar-29 500 CRISIL AAA/Stable








programme# 4-Feb-19 NA* 31-Mar-29 250 CRISIL AAA/Stable


programme# 17-May-19 NA* 31-Mar-29 500 CRISIL AAA/Stable


programme# 29-Jun-19 NA* 31-Mar-29 500 CRISIL AAA/Stable





7

NA* Long-term borrowingprogramme

NA* NA* NA* 21318.19 CRISIL AAA/Stable

NA* Long-term borrowingprogramme

NA* NA* NA* 65000 CRISIL AAA/Stable

#raised through bank loan*Not applicable Annexure - Details of Rating Withdrawn

ISIN Name of instrument Date of allotment Couponrate (%) Maturity date Issue size

(Rs Crore

NA Long-term borrowingprogramme^

NA NA NA 3000

NA Long-term borrowingprogramme^

NA NA NA 783.26

^Not raised for fiscal 2019

Annexure - Rating History for last 3 Years Current 2020 (History) 2019 2018 2017 Start of

2017

Instrument Type OutstandingAmount Rating Date Rating Date Rating Date Rating Date Rating Rating

Long-TermBorrowingProgramme

LT 195548.9631-03-20

CRISILAAA/Sta

ble 29-03-19

CRISILAAA/Sta

ble 29-03-18

CRISILAAA/Sta

ble 26-05-17

CRISILAAA/Sta

ble

CRISILAAA/Sta

ble

28-04-17 CRISILAAA/Sta

ble

Non ConvertibleDebentures LT -- -- -- -- 26-05-17

Withdrawal

CRISILAAA/Sta

ble


ble

Tax Free Bond LT 34000.0031-03-20

CRISILAAA/Sta

ble 29-03-19

CRISILAAA/Sta

ble 29-03-18

CRISILAAA/Sta

ble 26-05-17

CRISILAAA/Sta

ble

CRISILAAA/Sta

ble


ble

All amounts are in Rs.Cr.

Links to related criteria

CRISILs Approach to Financial Ratios

CRISILs Bank Loan Ratings - process, scale and default recognition

Criteria for Notching up Stand Alone Ratings of Entities Based on Government Support

8

http:\\www.crisil.com\Ratings\SectorMethodology\MethodologyDocs\criteria\CRISILs Approach to Financial Ratios.pdf

http:\\www.crisil.com\Ratings\SectorMethodology\MethodologyDocs\criteria\CRISILs Bank Loan Ratings - process, scale and default recognition.pdf

http:\\www.crisil.com\Ratings\SectorMethodology\MethodologyDocs\criteria\Criteria for Notching up Stand Alone Ratings of Entities Based on Government Support.pdf

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ICRA Limited

Ref: D/RAT/2020-21/N-128/01

Date: April 1, 2020

Mr. S. Q. Ahmad General Manager - Finance National Highways Authority of India (NHAI) G-5 & 6, Sector-10 Dwarka New Delhi – 110075

Dear Sir,

Re: ICRA Credit Rating for the Rs. 65,000 crore Long Term Borrowing Programme of

National Highways Authority of India

Please refer to the Rating Agreement dated March 26, 2020 and RRF No. DEL/2019-20/527 dated March 26, 2020 for carrying out the rating of the aforesaid Long-Term Borrowing Programme. The Rating Committee of ICRA, after due consideration, has assigned a [ICRA]AAA (pronounced as ICRA triple A) rating to the captioned Long Term Borrowing Programme. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. The Outlook on the long-term rating is Stable.

In any of your publicity material or other document wherever you are using our above rating, it should be stated as [ICRA]AAA.

This rating is specific to the terms and conditions of the proposed issue as was indicated to us by you and any change in the terms or size of the issue would require the rating to be reviewed by us. If there is any change in the terms and conditions or size of the instrument rated, as above, the same must be brought to our notice before the issue of the instrument. If there is any such change after the rating is assigned by us and accepted by you, it would be subject to our review and may result in change in the rating assigned. ICRA reserves the right to review and/or, revise the above at any time on the basis of new information or unavailability of information or such other circumstances, which ICRA believes, may have an impact on the rating assigned to you.

The rating, as aforesaid, however, should not be treated as a recommendation to buy, sell or hold the bonds, debentures and/ or other instruments of like nature to be issued by you.

As mentioned above and in accordance with the aforesaid circular you are requested to furnish a monthly ‘No Default Statement (NDS)’ (in the format enclosed) on the first working day of every month, confirming the timeliness of payment of all obligations against the rated debt programme.

You are also requested to forthwith inform us about any default or delay in repayment of interest or principal amount of the instrument rated, as above, or any other debt instruments/ borrowing and keep us informed of any other developments which may have a direct or indirect impact on the debt servicing capability of the company including any proposal for re-schedulement or postponement of the repayment programmes of the dues/ debts of the company with any lender(s) / investor(s). Further, you are requested to inform us immediately as and when the borrowing limit for the instrument rated, as above, or as prescribed by the regulatory authority(ies) is exceeded.

We thank you for your kind cooperation extended during the course of the rating exercise. Should you require any clarification, please do not hesitate to get in touch with us.

We look forward to your communication and assure you of our best services.

With kind regards,

For ICRA Limited

Sabyasachi Majumdar (Senior Vice President)

Digitally signed by SABYASACHI MAJUMDAR Date: 2020.04.01 14:20:56 +05'30'

Encl:

‘No Default Statement on the Company Letter Head’ To, ICRA Limited Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurugram -122002 Dear Sir/ Madam, 1. We hereby confirm that as on date there are no overdues or default on our listed debt obligations.

(Securities). 2. We hereby confirm that as on date there are no overdues or default on our unlisted debt

obligations. (Securities). 3. We also confirm that in the month ended <<Month and Year name>>, there has been no instance

of delay in servicing of our listed debt obligations (Securities). 4. We also confirm that in the month ended <<Month and Year name>>, there has been no instance

of delay in servicing of our un-listed debt obligations(Securities). 5. We also confirm that in the month ended <<Month and Year name>>, there has been no

instance of delay in servicing of debt obligations guaranteed by us. 6. We hereby confirm that as on date and in the month ended <<Month and Year name>> there are

no over dues or default on payment of interest/installment obligations on loans from banks/financial institutions.

7. We hereby confirm that as on date there are no over dues or default on payment of interest/installment obligations on loans from banks/financial institutions which continues beyond 30 days.

8. We hereby confirm that as on date there are no over dues or default on revolving facilities like cash credit, from banks/financial institutions which continues beyond 30 days.

9. We also confirm that there is no amount remaining unpaid for more than 30 days from the invocation of the bank guarantee facilities or devolvement of Letters of Credit as on date / in the month ended <<Month and Year name>> We also confirm that there has not been any instance of devolvement of Letter of Credit in the month ended <<Month and Year name>>

10. We also confirm that there has been no overdrawal of the drawing power sanctioned by the bank for a period of more than 30 consecutive days in case of bank facilities which do not have scheduled maturity/repayment dates.

11. Details of default in payment of interest/installment obligations on loans including revolving facilities like cash credit from banks/financial institutions and any overdraws beyond what is sanctioned by the bank, beyond 30 days as on date/ in the month ended <<Month and Year name>>, in any of the above case (if any):

Name of Lender

Nature of obligation

Date of Default

Current default amount

Amount to be paid

Actual Date of Payment (if any)

Remarks

Text Term Loan, CC

. Row 2

12. Details of default in payment of principal/interest obligations as on date/ in the month ended <<Month and Year name>>, on our listed and unlisted debt obligations (Securities), in any of the above case (if any):

Name of the Instrument

ISIN Amount to be paid

Due Date of Payment

Actual Date of Payment

Remarks

NCD

Thanking You, Yours faithfully, <Authorized Signatory of Issuer>

1

April 02, 2020

National Highways Authority of India: Ratings reaffirmed; rated amount enhanced

Summary of rating action

Instrument* Previous Rated Amount (Rs. crore)

Current Rated Amount (Rs. crore)

Rating Action

Long Term Borrowing Programme for 2020-21

0.0 65,000 [ICRA]AAA (Stable); Assigned


61,217.0 61,217.0 [ICRA]AAA (Stable); Reaffirmed

Long-term Borrowing Programme for 2017-18


Long-term Borrowing Programme for 2016-17


Tax-free Bonds – 2015-16 19,000.0 19,000.0 [ICRA]AAA (Stable); Reaffirmed

Fund based- Overdraft 2,000.0 2,000.0 [ICRA]A1+; Reaffirmed Total 1,65,868.0 2,30,868.0 *Instrument details are provided in Annexure-1

Rationale

The ratings take support from National Highways Authority of India’s (NHAI) strong operational and financial linkages

with the Government of India (GoI) and its strategic importance, given its role as the nodal agency for the development

and maintenance of national highways in the country. The ratings also take comfort from NHAI’s stable funding sources,

which include fuel cess and project revenues (ploughing back of funds from toll collection, negative grant, and revenue

sharing). Besides, the authority has received funds in the past by way of additional budgetary allocations and

monetisation of assets under the toll operate transfer (TOT) model. These strengths also provide NHAI financial

flexibility, as evident from its ability to raise long-tenure debt at competitive cost in the past.

However, the increasing borrowings and sizeable contingent liabilities of NHAI are key credit challenges. Its expenditure

towards implementation of national highway projects has increased significantly on account of higher land acquisition

and construction costs as well as the shift towards engineering, procurement and construction (EPC) and hybrid annuity

model (HAM) mode of project award. These, along with the moderate allocation of cess towards NHAI, have resulted in

increased dependence on Internal and Extra Budgetary Resources (IEBR) to be arranged by NHAI, which has led to a rise

in its borrowings to ~Rs. 2.0 lakh crore as of December 31, 2019 and increased debt servicing requirements. This is likely

to increase further over the medium term with the proposed borrowings for the ongoing Bharatmala Pariyojana.

However, ICRA has noted NHAI’s plans of monetising the operational road assets through the TOT model and

Infrastructure Investment Trust (InvIT), which can provide sizeable funds and help reduce the dependence on external

borrowings to some extent.

Going forward, support from the GoI (both financially and operationally) would be crucial for maintaining the credit

profile of NHAI and would remain a key rating sensitivity. The authority’s ability to monetise assets through TOT and

InvIT and reduce dependence on external borrowings would also be a key monitorable.

2

Key rating drivers

Credit strengths

Strategic importance to GoI - NHAI is an autonomous GoI authority under the Ministry of Road Transport and Highway

(MoRTH). It was established on June 15, 1989 as per the National Highways Authority of India Bill, 1988. NHAI is the

nodal agency for the development and maintenance of national highway projects. Given the significance of the national

highway infrastructure, NHAI is strategically important to the GoI.

Strong operational and financial linkages with GoI - As part of the GoI, NHAI has strong financial and operational linkage

with the same. Apart from being the promoter, the GoI has statutory and regulatory powers over NHAI and supports it in

major policy decisions. The GoI also provides financial support to the authority in the form of budgetary allocations and

the flexibility to raise funds through capital gains bonds and tax-free bonds at competitive borrowing cost.

Stable funding sources - NHAI has stable funding sources owing to the allocation of fuel cess funds, additional budgetary

resources, project revenues (toll collections, revenue share, negative grant and premium receivables), and flexibility to

raise funds at competitive borrowing cost. This apart, NHAI can monetise its operational assets through TOT and InvIT

models. The authority’s ability to raise funds through these modes can reduce its dependence on external borrowings. In

FY2021, NHAI’s expenditure is expected to be funded through Rs. 20,750 crore of cess fund, Rs. 11,500 crore of plough

back from consolidated fund of India, Rs. 10,250 crore of asset monetisation through the TOT mode, and Rs. 65,000 crore

through borrowings.

Credit challenges

Increasing borrowings - NHAI’s project-implementation cost has increased substantially with more projects awarded on

EPC/HAM basis, requiring upfront funds and higher land acquisition costs. Due to this, its dependence on market

borrowings has increased significantly over the years. Its debt-to-capital ratio has increased from 0.26 times as on March

31, 2014 to 0.97 times as on September 30, 2019. In FY2021, about 60% of the total expenditure is expected to be

funded through debt compared with ~33% in FY2014. The dependence on debt is expected to increase going forward

due to higher funding requirements for Bharatmala Pariyojana, which has an initial estimated cost of Rs. 5,35,000 crore

for phase-1. However, over the longer term, with the completion of the projects awarded under EPC/HAM mode, NHAI’s

toll collections would increase and the same can also be monetised.

Sizeable contingent liabilities - NHAI has sizeable contingent liabilities, most of which are from disputed claims filed by

contractors/developers. As of March 31, 2019, NHAI had contingent liability of Rs. 65,320 crore and $0.58 million in

arbitration and Rs. 4,716 crore and EUR 0.26 million in court cases. While the contingent liability on account of claims

raised by private players is sizeable, given that the cases which have been settled in the past were at a fraction of the

amount demanded, ICRA expects actual liability from these contingent liabilities to be similar. Nevertheless, the final

quantum and timing of the settlement of these claims could have a bearing on NHAI’s cash flows and would remain a key

monitorable. ICRA notes that in the annual report of FY2018, the auditor (Comptroller and Auditor General of India)

mentioned that the balance sheet and profit and loss accounts were not drawn in the format approved by the GoI.

Liquidity position: Strong The liquidity position of NHAI is strong and is supported by the expectation of timely support from GoI, given the

strategic importance of the authority. As of March 30, 2020, NHAI had ~Rs. 5,000 crore of unencumbered funds, which

are sufficient to meet the near-term debt obligations. This apart, NHAI has significant undrawn term loan and overdraft

limits which supports its liquidity position.

3

Rating sensitivities

Positive triggers – Not applicable

Negative triggers – Negative pressure on the ratings could arise if there is any weakness in its operational and financial

linkages with the GoI, or any reduction in its importance as a nodal agency for highway construction. Negative pressure

on rating could also arise if the share of incremental budgetary support to NHAI (including toll collections) in overall

expenditure declines.

Analytical approach

Analytical Approach Comments

Applicable Rating Methodologies

Corporate Credit Rating Methodology BOT Toll Road Projects in India Rating Methodology for BOT (Annuity) Roads Rating Methodology for BOT (Hybrid Annuity Model) Roads Impact of Parent or Group Support on an Issuer’s Credit Rating

Parent/Group Support

Parent: Government of India (GoI) The assigned rating factors in the strategic importance of NHAI for the GoI and its strong operational and financial linkages; it receives support from the GoI in the form of cess allocation, plough back of project revenues and additional budgetary support; ICRA expects the Government to extend timely financial support to NHAI, as and when required

Consolidation / Standalone Standalone

About the issuer

NHAI is an autonomous authority constituted by an Act of Parliament, the National Highways Authority of India Act,

1988. It operates under the MoRTH and is responsible for the development, maintenance and management of the

national highways in India. The authority was operationalised in February 1995. NHAI is also entrusted with the

responsibility of implementing NHDP, Bharatmala Pariyojana and other programmes approved by the GoI such as SARDP-

NE and special projects across various states.

In October 2017, the GoI has approved Phase-1 of Bharatmala Pariyojana involving national highway development of

around 34,800 km with a total planned expenditure of Rs. 5.35 lakh crore. Out of 34,800 km of total length, 24,800 km is

for Bharatmala Pariyojana, and 10,000 km for balance work under NHDP. NHAI is also responsible for undertaking the

Bharatmala Pariyojana along with MoRTH.

Key financial indicators (audited) FY2017 FY2018 Operating Income (Rs. crore) 12.20 12.57 PAT (Rs. crore) -267.15 -379.21 OPBDIT/OI (%) Negative Negative

RoCE (%) Negative Negative

Total Outside Liabilities/Tangible Net Worth (times) 0.70 0.92 Total Debt/OPBDIT (times) Negative Negative

Interest Coverage (times) Negative Negative

DSCR Negative Negative

https://www.icra.in/Rating/ShowMethodologyReport/?id=602





4

Status of non-cooperation with previous CRA: Not applicable

Any other information: None

Rating history for last three years:

Instrument

Current Rating (FY2020) Chronology of Rating History for the past 3 years

Type

Amount Rated (Rs. crore)

Amount Outstanding as on March 1, 2020 (Rs. crore)

Date & Rating

Date & Rating in FY2020



02-Apr 2020 29-May- 2019

4-Apr- 2018

24-Nov- 2017

13-Apr- 2017

1 Tax Free Bonds 2015-16

Long Term

19,000 19,000 [ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

2 Long Term Borrowing Programme for 2016-17

Long Term

33,118 28,425 [ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

3 Fund-based (Overdraft)

Short Term

2,000 - [ICRA] A1+ [ICRA] A1+ [ICRA] A1+ [ICRA] A1+ [ICRA] A1+


Long Term

50,533 50,533 [ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)


Long Term

61,217 61,217 [ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

[ICRA] AAA (Stable)

-


Long Term

65,000 - [ICRA] AAA (Stable)

Complexity level of the rated instrument

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The

classification of instruments according to their complexity levels is available on the website www.icra.in

https://www.icra.in/Rating/ShowRatingPolicyReport/?id=1&type=new

5

Annexure-1: Instrument details

ISIN No Instrument Name

Date of Issuance / Sanction

Coupon Rate

Maturity Date


Current Rating and Outlook

INE906B07EE9

Tax-Free Bonds (2015-16)

18.09.2015 7.11% 18.09.2025 549 [ICRA]AAA(Stable) INE906B07EF6 18.09.2015 7.28% 18.09.2030 3,323 [ICRA]AAA(Stable) INE906B07EG4 11.01.2016 7.14% 11.01.2026 686 [ICRA]AAA(Stable) INE906B07EH2 11.01.2016 7.39% 11.01.2026 656 [ICRA]AAA(Stable) INE906B07EI0 11.01.2016 7.35% 11.01.2031 5,983 [ICRA]AAA(Stable) INE906B07EJ8 11.01.2016 7.60% 11.01.2031 2,675 [ICRA]AAA(Stable) INE906B07EK6 18.02.2016 7.02% 18.02.2026 455 [ICRA]AAA(Stable) INE906B07EL4 18.02.2016 7.39% 18.02.2031 1,373 [ICRA]AAA(Stable) INE906B07EM2 09.03.2016 7.04% 09.03.2026 98 [ICRA]AAA(Stable) INE906B07EN0 09.03.2016 7.29% 09.03.2026 192 [ICRA]AAA(Stable) INE906B07EO8 09.03.2016 7.39% 09.03.2031 1,882 [ICRA]AAA(Stable) INE906B07EP5 09.03.2016 7.69% 09.03.2031 1,128 [ICRA]AAA(Stable) INE906B07EQ3

54-EC Bonds (2016-17) under Long Term Borrowing Programme for 2016-17*

30.04.2016 6.0% 30.04.2019 270 [ICRA]AAA(Stable) INE906B07ER1 31.05.2016 6.0% 31.05.2019 367 [ICRA]AAA(Stable) INE906B07ES9 30.06.2016 6.0% 30.06.2019 441 [ICRA]AAA(Stable) INE906B07ET7 31.07.2016 6.0% 31.07.2019 521 [ICRA]AAA(Stable) INE906B07EU5 31.08.2016 6.0% 31.08.2019 417 [ICRA]AAA(Stable) INE906B07FC0 30.09.2016 6.0% 30.09.2019 455 [ICRA]AAA(Stable) INE906B07EV3 31.10.2016 6.0% 31.10.2019 433 [ICRA]AAA(Stable) INE906B07EW1 30.11.2016 6.0% 30.11.2019 566 [ICRA]AAA(Stable) INE906B07EX9 31.12.2016 5.25% 31.12.2019 455 [ICRA]AAA(Stable) INE906B07EY7 31.01.2017 5.25% 31.01.2020 392 [ICRA]AAA(Stable) INE906B07EZ4 28.02.2017 5.25% 28.02.2020 376 [ICRA]AAA(Stable) INE906B07FA4 31.03.2017 5.25% 31.03.2020 880 [ICRA]AAA(Stable) INE906B07FB2 Taxable Bonds

under Long Term Borrowing Programme for 2016-17

03.08.2016 8.03% 03.08.2041 5,000 [ICRA]AAA(Stable) INE906B07FD8 01.09.2016 7.68% 30.08.2041 5,000 [ICRA]AAA(Stable) INE906B07FE6 23.12.2016 7.17% 23.12.2021 5,020 [ICRA]AAA(Stable) INE906B07FF3 24.01.2017 7.22% 24.01.2047 8,500 [ICRA]AAA(Stable) INE906B07FG1 20.03.2017 7.60% 18.03.2022 4,025 [ICRA]AAA(Stable) NA Fund-based

Overdraft Limit

- - - 2,000 [ICRA]A1+

INE906B07FH9

54-EC Bonds (2017-18) under Long Term Borrowing Programme for 2017-18

30.04.2017 5.25% 30.04.2020 278 [ICRA]AAA(Stable) INE906B07FI7 30.05.2017 5.25% 31.05.2020 345 [ICRA]AAA(Stable) INE906B07FJ5 30.06.2017 5.25% 30.06.2020 379 [ICRA]AAA(Stable) INE906B07FK3 31.07.2017 5.25% 31.07.2020 515 [ICRA]AAA(Stable) INE906B07FL1 31.08.2017 5.25% 31.08.2020 419 [ICRA]AAA(Stable) INE906B07FM9 30.09.2017 5.25% 30.09.2020 470 [ICRA]AAA(Stable) INE906B07FN7 31.10.2017 5.25% 31.10.2020 457 [ICRA]AAA(Stable) INE906B07FO5 30.11.2017 5.25% 30.11.2020 509 [ICRA]AAA(Stable) INE906B07FP2 31.12.2017 5.25% 31.12.2020 544 [ICRA]AAA(Stable) INE906B07FQ0 31.01.2018 5.25% 31.01.2021 537 [ICRA]AAA(Stable) INE906B07FR8 28.02.2018 5.25% 28.02.2021 565 [ICRA]AAA(Stable)

6

ISIN No Instrument Name

Date of Issuance / Sanction

Coupon Rate

Maturity Date


Current Rating and Outlook

INE906B07FS6 31.03.2018 5.25% 31.03.2021 1,639 [ICRA]AAA(Stable) INE906B07FT4

Taxable Bonds under Long Term Borrowing Programme for 2017-18

06.06.2017 7.27% 06.06.2022 1,525 [ICRA]AAA(Stable) INE906B07FU2 16.06.2017 7.24% 16.06.2047 5,000 [ICRA]AAA(Stable) INE906B07FV0 14.07.2017 7.14% 12.07.2047 3,500 [ICRA]AAA(Stable) INE906B07FW8 24.08.2017 7.38% 24.08.2032 5,000 [ICRA]AAA(Stable) INE906B07FX6 06.11.2017 7.11% 06.11.2022 850 [ICRA]AAA(Stable) INE906B08021 22.11.2017 7.64% 22.11.2032 5,000 [ICRA]AAA(Stable) NA Loans under


17.01.2018 7.70% 17.01.2028 10,000 [ICRA]AAA(Stable)

NA 07.03.2018 7.92% 07.03.2028 10,000 [ICRA]AAA(Stable)

NA Masala Bonds 18.05.2017 7.30% 18.05.2022 3,000 [ICRA]AAA(Stable)

NA Loans under Long Term Borrowing Programme for 2018-19

07.06.2018 8.38% 07.06.2028 5,000 [ICRA]AAA(Stable)





INE906B07GK1 Taxable Bonds under Long Term Borrowing Programme for 2018-19

28.06.2018 8.55% 28.06.2048 2,195 [ICRA]AAA(Stable) INE906B07GL9 02.08.2018 8.45% 02.08.2048 2,060 [ICRA]AAA(Stable) INE906B07GM7 21.12.2018 8.19% 21.12.2048 2,055 [ICRA]AAA(Stable) INE906B07GN5 21.01.2019 8.37% 21.01.2029 1,675 [ICRA]AAA(Stable) INE906B07GO3 05.02.2019 8.49% 05.02.2029 2,000 [ICRA]AAA(Stable) INE906B07GP0 28.03.2019 8.27% 28.03.2029 5,500 [ICRA]AAA(Stable) INE906B07GQ8 29.03.2019 8.18% 29.03.2049 2,025 [ICRA]AAA(Stable) INE906B07FY4

54-EC Bonds (2017-18) under Long Term Borrowing Programme for 2018-19

30.04.2018 5.75% 30.04.2023 154 [ICRA]AAA(Stable) INE906B07FZ1 30.05.2018 5.75% 31.05.2023 248 [ICRA]AAA(Stable) INE906B07GA2 30.06.2018 5.75% 30.06.2023 314 [ICRA]AAA(Stable) INE906B07GB0 31.07.2018 5.75% 31.07.2023 439 [ICRA]AAA(Stable) INE906B07GC8 31.08.2018 5.75% 31.08.2023 348 [ICRA]AAA(Stable) INE906B07GD6 30.09.2018 5.75% 30.09.2023 353 [ICRA]AAA(Stable) INE906B07GE4 31.10.2018 5.75% 31.10.2023 360 [ICRA]AAA(Stable) INE906B07GF1 30.11.2018 5.75% 30.11.2023 329 [ICRA]AAA(Stable) INE906B07GG9 31.12.2018 5.75% 31.12.2023 403 [ICRA]AAA(Stable) INE906B07GH7 31.01.2019 5.75% 31.01.2024 435 [ICRA]AAA(Stable) INE906B07GI5 28.02.2019 5.75% 29.02.2024 430 [ICRA]AAA(Stable) INE906B07GJ3 31.03.2019 5.75% 31.03.2024 893 [ICRA]AAA(Stable) NA Long Term

Borrowing Programme for 2020-21

- - - 65,000 [ICRA]AAA(Stable)

*Already paid Source: NHAI

7

Annexure-2: List of entities considered for consolidated analysis

Not Applicable

8

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or its contents


Shri Madhup Kumar,Chief General Manager (Finance)National Highways Authority of IndiaG-5&6, Sector,Dwarka, New Delhi - 110075Telefax: +91 11 25093518

April 01, 2020

Dear Sir,

Re: Long-term issuer ratings of National Highways Authority of India

India Ratings and Research (Ind-Ra) has affirmed National Highways Authority of India’s (NHAI) Long-Term Issuer Rating at ‘IND AAA’ witha Stable Outlook. The instrument-wise actions are given below:

Instrument Type Size of Issue (billion) Rating/Outlook Rating Action

FY21 borrowing programme (including 54ECbonds for FY20) INR650 IND AAA/Stable Assigned

FY20 borrowing programme (including 54ECbonds for FY20) INR750 IND AAA/Stable Affirmed

FY19 borrowing programme (including 54ECbonds for FY19)

INR612.16 (reduced fromINR620) IND AAA/Stable Affirmed

FY18 borrowing programme (including 54ECbonds for FY18) INR505.32 IND AAA/Stable Affirmed

FY17 borrowing programme INR275.45 (reduced fromINR331.18)

IND AAA/Stable Affirmed

Tax-free bonds (FY12 and FY16) INR290 IND AAA/Stable Affirmed

54 EC bonds (FY16) INR8.63 WD Withdrawn

In issuing and maintaining its ratings, India Ratings relies on factual information it receives from issuers and underwriters and from other sourcesIndia Ratings believes to be credible. India Ratings conducts a reasonable investigation of the factual information relied upon by it in accordancewith its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources areavailable for a given security.

The manner of India Ratings' factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of therated security and its issuer, the requirements and practices in India where the rated security is offered and sold, the availability and nature ofrelevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such asaudit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by thirdparties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particularjurisdiction of the issuer, and a variety of other factors.

Users of India Ratings’ ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all

Devendra Pant Sunil Kumar SinhaSenior Director Director

of the information India Ratings relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers areresponsible for the accuracy of the information they provide to India Ratings and to the market in offering documents and other reports. In issuingits ratings India Ratings must rely on the work of experts, including independent auditors with respect to financial statements and attorneys withrespect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events thatby their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events orconditions that were not anticipated at the time a rating was issued or affirmed.

India Ratings seeks to continuously improve its ratings criteria and methodologies, and periodically updates the descriptions on its website of itscriteria and methodologies for securities of a given type. The criteria and methodology used to determine a rating action are those in effect at thetime the rating action is taken, which for public ratings is the date of the related rating action commentary. Each rating action commentary providesinformation about the criteria and methodology used to arrive at the stated rating, which may differ from the general criteria and methodology forthe applicable security type posted on the website at a given time. For this reason, you should always consult the applicable rating actioncommentary for the most accurate information on the basis of any given public rating.

Ratings are based on established criteria and methodologies that India Ratings is continuously evaluating and updating. Therefore, ratings are thecollective work product of India Ratings and no individual, or group of individuals, is solely responsible for a rating. All India Ratings reports haveshared authorship. Individuals identified in an India Ratings report were involved in, but are not solely responsible for, the opinions stated therein.The individuals are named for contact purposes only.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan orsecurity or to undertake any investment strategy with respect to any investment, loan or security or any issuer. Ratings do not comment on theadequacy of market price, the suitability of any investment, loan or security for a particular investor (including without limitation, any accountingand/or regulatory treatment), or the tax-exempt nature or taxability of payments made in respect of any investment, loan or security. India Ratingsis not your advisor, nor is India Ratings providing to you or any other party any financial advice, or any legal, auditing, accounting, appraisal,valuation or actuarial services. A rating should not be viewed as a replacement for such advice or services. Investors may find India Ratingsratings to be important information, and India Ratings notes that you are responsible for communicating the contents of this letter, and any changeswith respect to the rating, to investors.

It will be important that you promptly provide us with all information that may be material to the ratings so that our ratings continue to beappropriate. Ratings may be raised, lowered, withdrawn, or placed on Rating Watch due to changes in, additions to, accuracy of or the inadequacyof information or for any other reason India Ratings deems sufficient.

Nothing in this letter is intended to or should be construed as creating a fiduciary relationship between India Ratings and you or between IndiaRatings and any user of the ratings.

In this letter, “India Ratings” means India Ratings & Research Pvt. Ltd. and any successor in interest.

We are pleased to have had the opportunity to be of service to you. If we can be of further assistance, please contact the undersigned at +91 224000 1700.

Sincerely,

India Ratings

National Highways Authority of India 01-April-2020

/

01APR 2020

By Bijoy Thomas

India Ratings and Research (Ind-Ra) has affirmed National Highways Authority of India’s (NHAI) Long-Term Issuer Rating at ‘IND AAA’. TheOutlook is Stable. The instrument-wise rating actions are given below:

Instrument Type Date of

Issuance

Coupon

Rate

(%)

Maturity

Date

Size of Issue (billion) Rating/Outlook Rating

Action

FY21 borrowing programme (including 54EC bonds for FY21)* - - - INR650 IND AAA/Stable Assigned

FY20 borrowing programme (including 54EC bonds for FY20)* - - - INR750 IND AAA/Stable Affirmed

FY19 borrowing programme (including 54EC bonds for FY19)* - - - INR612.16 (reduced from INR620) IND AAA/Stable Affirmed

FY18 borrowing programme (including 54EC bonds for FY18)* - - - INR505.32 IND AAA/Stable Affirmed

FY17 borrowing programme* - - - INR275.45 (reduced fromINR331.18)

IND AAA/Stable Affirmed

Tax-free bonds (FY12 and FY16)* - - - INR290 IND AAA/Stable Affirmed

54 EC bonds (FY16)* - - - INR8.63 WD Withdrawn

(paid in full)

* Details in annexureKEY RATING DRIVERS

Public Policy Institution: Given NHAI is a premier nodal agency responsible for the development of national highways in India, it is strategically importantto the government of India (GoI). NHAI’s fundamental purpose is to improve the national road transit infrastructure, better serve the national economy andimprove the country’s standard of living. Its mandate highlights the GoI’s priority on economic development, while retaining an underlying social welfarefunction. Its tax exemption status and privilege to raise funds through Section 54EC capital gains bonds and tax-free bonds reiterate its importance to theGoI. Robust Sovereign Control: The ratings factor in NHAI’s significant financial, operational and managerial linkages with the GoI, as well as its statutorystatus. Strong federal control, by way of continuous support from the GoI in the form of capital grants, the allocation of cess funds, additional budgetarysupport and guarantees for its market borrowing programmes, through union budget allocation and operational performance, support the ratings. The ratings draw comfort from National Highways Authority of India Act, 1988, which states i) the GoI will provide capital to NHAI for the discharge of itsfunctions as may be required ii) NHAI can borrow money from any sources as it may deem fit and iii) the GoI has the power to supersede NHAI in case ofdefault in complying with its functions. Moreover, substantial budgetary allocation (including internal and extra-budgetary resources support) of INR1,075 billion for NHAI in FY21 (budget estimates(BE)) underscores the importance of NHAI to the GoI for building roads and highway infrastructure in India. Focus on consolidation: NHAI has been focussing on consolidation in recent times which is visible from the pace of awarding. The total length awarded byNHAI gradually increased from 1,435km in FY14 to a peak of 7,396km in FY18 before moderating to 2,222km in FY19. NHAI further awarded a total of1,536km in 1HFY20. Notwithstanding the same, the pace of execution has increased steadily since FY15. The average execution per day steadily increased

India Ratings A�rms National Highways Authority of India at 'IND AAA'/Stable;Rates FY21 Borrowing Programme

Login

https://www.indiaratings.co.in/Analyst?analystID=40&analystName=Bijoy%20Thomas

/

from 4.1km per day in FY15 to 9.3km per day in FY19. The same further picked up to a rate of 10 km per day in 1HFY20. Steep Increase in Total Debt; though Asset Monetisation would help contain Debt: With a predominant focus on awarding projects throughengineering procurement construction and hybrid annuity model modes in the recent years, NHAI’s borrowings have increased steeply. The total debtoutstanding is likely to be in the range of INR2.4 trillion-2.5 trillion at FYE20. Nevertheless, Ind-Ra expects NHAI’s focus on consolidation in the projectsawarded till date, along with the emphasis on asset monetisation to help it contain the increase in debt in the near-to-medium term. After receiving a healthyresponse from investors during NHAI’s opening bid to monetise operational assets through the toll-operate-transfer (TOT) route in FY19, the subsequent TOTofferings have met with a rather tepid response. However, suitable amendments to the original scheme post approval from the cabinet have been made toattract a wider investor audience. NHAI now has the flexibility to vary the concession period of toll projects offered between 15-30 years as against a fixedoffer of 30 years earlier. Also, road assets completing one year of operations can be put on offer as against the earlier condition of a two-year trackrecord. Liquidity Indicator - Superior: With a substantial build-up of debt, NHAI’s repayment obligations have also shown a steady increase. Nevertheless, thecapital receipts in the form of cess, toll plough back and additional budgetary support have, since FY15, been higher than the repayment commitments(interest and principal). Now with NHAI actively looking at asset monetisation, the capital receipts will be further bolstered thereby aiding liquidity. In FY21,NHAI is likely to have repayment obligations of INR250.3 billion while capital receipts according to the budgetary provisions include the proceeds from cessfund of INR207.5 billion, toll plough back of INR115 billion and asset monetisation proceeds of INR102.5 billion. Additional budgetary support could also flowfor specific projects. NHAI’s ability to raise market borrowings at competitive rates of up to INR650 billion in FY21 along with cash balances of INR69.1 billion (as on 31 January2020) and unutilised overdraft limits of INR50 billion further support liquidity. In Ind-Ra’s opinion, in view of NHAI’s strong linkages with the GoI, timelysupport from its parent is likely to flow in case of any liquidity challenges.

Sizable Contingent Liabilities: Along with a build-up of debt over the years, there has also been a corresponding increase in the contingent liabilities.They stood at around INR628 billion at FYE18 and are likely to have touched INR1.1 trillion by FYE20. These contingent liabilities mostly relate toarbitration/court cases filed by concessionaires/contractors. The actual cash outgo in relation to the settlement of these claims in any particular year has beenmarginal till date. Nevertheless, any settlement involving a larger sum could impact the cash flows.

RATING SENSITIVITIES

Negative: Any weakening of NHAI’s financial, operational and managerial linkages with the GoI and/or a fall in the capital receipts to a level lower than therepayment commitments will lead to a negative rating action.

COMPANY PROFILE

NHAI is an autonomous organisation of the GoI under the Ministry of Road Transport and Highways and was constituted on 15 June 1989 under the NationalHighways Authority of India Act, 1988. NHAI commenced operations in February 1995, with the appointment of full-time chairman and other members. Themain objective of NHAI is to develop, maintain and manage national highways entrusted to it. FINANCIAL SUMMARY

Particulars (INR billion) FY17 FY18

Total income 0.14 0.14

Total debt 753.85 1,225.24

Source: Ind-Ra, NHAI

RATING HISTORY

Instrument Type Current Rating/Outlook Historical Rating/Outlook

Rating Type Rated

Limits

(billion)

Rating 29 March 2019 29 March

2018

11 April 2016

Issuer rating Long-term IND AAA/Stable IND AAA/Stable INDAAA/Stable

IND AAA/Stable

Tax-free bonds (FY12 and FY16) Long-term INR290 IND AAA/Stable IND AAA/Stable INDAAA/Stable

IND AAA/Stable

Long-term bonds (FY16) Long-term INR8.63 WD IND AAA/Stable INDAAA/Stable

IND AAA/Stable

/

FY17 borrowing programme Long-term INR275.45 IND AAA/Stable IND AAA/Stable INDAAA/Stable

IND AAA/Stable

FY18 borrowing programme (including 54EC bonds for FY18) Long-term INR505.32 IND AAA/Stable IND AAA/Stable INDAAA/Stable

-

FY19 borrowing programme (including 54EC bonds for FY19) Long-term INR612.16 IND AAA/Stable IND AAA/Stable INDAAA/Stable

-

FY20 borrowing programme (including 54EC bonds for FY20) Long-term INR750 IND AAA/Stable IND AAA/Stable - -

FY21 borrowing programme (including 54EC bonds for FY20) Long-term INR650 IND AAA/Stable - - -

ANNEXURE

Instrument ISIN Coupon Rate (%) Date of Issuance Maturity Date Size of Issue (INR billion) Rating/Outlook

Tax-free bonds (FY12) INE906B07CA1 8.20 25 January 2012 25 January 2022 67.14 IND AAA/Stable

Tax-free bonds (FY12) INE906B07CB9 8.30 25 January 2012 25 January 2027 32.86 IND AAA/Stable

Total 100.00

54 EC bonds (FY16) INE906B07ED1 6.00 1 March 2016 31 March 2019 8.63 WD

Total 8.63

Tax-free bonds (FY16) INE906B07EE9 7.11 18 September 2015 18 September 2025 5.49 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EF6 7.28 18 September 2015 18 September 2030 33.23 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EG4 7.14 11 January 2016 11 January 2026 6.86 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EH2 7.39 11 January 2016 11 January 2026 6.56 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EI0 7.35 11 January 2016 11 January 2031 59.83 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EJ8 7.60 11 January 2016 11 January 2031 26.75 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EK6 7.02 18 February 2016 18 February 2026 4.55 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EL4 7.39 11 January 2016 18 February 2031 13.73 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EM2 7.04 9 March 2016 9 March 2026 0.98 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EN0 7.29 9 March 2016 9 March 2026 1.92 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EO8 7.39 9 March 2016 9 March 2031 18.82 IND AAA/Stable

Tax-free bonds (FY16) INE906B07EP5 7.69 9 March 2016 9 March 2031 11.28 IND AAA/Stable

Total 190.00

54 EC bonds (FY18) INE906B07FH9 5.25 30 April 2017 30 April 2020 2.78 IND AAA/Stable

54 EC bonds (FY18) INE906B07FI7 5.25 31 May 2017 31 May 2020 3.45 IND AAA/Stable

54 EC bonds (FY18) INE906B07FJ5 5.25 30 June 2017 30 June 2020 3.79 IND AAA/Stable

54 EC bonds (FY18) INE906B07FK3 5.25 31 July 2017 31 July 2020 5.15 IND AAA/Stable

54 EC bonds (FY18) INE906B07FL1 5.25 31 August 2017 31 August 2020 4.19 IND AAA/Stable

54 EC bonds (FY18) INE906B07FM9 5.25 30 September 2017 30 September 2020 4.70 IND AAA/Stable

54 EC bonds (FY18) INE906B07FN7 5.25 31 October 2017 31 October 2020 4.57 IND AAA/Stable

54 EC bonds (FY18) INE906B07FO5 5.25 30 November 2017 30 November 2020 5.09 IND AAA/Stable

54 EC bonds (FY18) INE906B07FP2 5.25 31 December 2017 31 December 2020 5.44 IND AAA/Stable

54 EC bonds (FY18) INE906B07FQ0 5.25 31 January 2018 31 January 2021 5.37 IND AAA/Stable

54 EC Bonds (FY18) INE906B07FR8 5.25 28 February 2018 28 February 2021 5.65 IND AAA/Stable

54 EC bonds (FY18) INE906B07FS6 5.25 31 March 2018 31 March 2021 16.39 IND AAA/Stable

Total 66.57

Taxable bonds (FY17) INE906B07FB2 8.03 3 August 2016 3 August 2041 50.00 IND AAA/Stable

Taxable bonds (FY17) INE906B07FD8 7.68 1 September 2016 30 August 2041 50.00 IND AAA/Stable

Taxable bonds (FY17) INE906B07FE6 7.17 23 December 2016 23 December 2021 50.20 IND AAA/Stable

Taxable bonds (FY17) INE906B07FF3 7.22 24 January 2017 24 January 2047 85.00 IND AAA/Stable

Taxable bonds (FY17) INE906B07FG1 7.60 20 March 2017 18 March 2022 40.25 IND AAA/Stable

Total 275.45

/

Taxable bonds (FY18) INE906B07FT4 7.27 6 June 2017 6 June 2022 15.25 IND AAA/Stable

Taxable bonds (FY18) INE906B07FU2 7.24 16 June 2017 16 June 2047 50.00 IND AAA/Stable

Taxable bonds (FY18) INE906B07FV0 7.14 14 July 2017 14 July 2047 35.00 IND AAA/Stable

Taxable bonds (FY18) INE906B07FW8 7.38 24 August 2017 24 August 2032 50.00 IND AAA/Stable

Taxable bonds (FY18) INE906B07FX6 7.11 6 November 2017 6 November 2022 8.50 IND AAA/Stable

Taxable bonds (FY18) INE906B08021 7.64 22 November 2017 22 November 2032 50.00 IND AAA/Stable

Total 208.75

54 EC bonds (FY19) INE906B07FY4 5.75 30 April 2018 30 April 2023 1.54 IND AAA/Stable

54 EC bonds (FY19) INE906B07FZ1 5.75 31 May 2018 31 May 2023 2.48 IND AAA/Stable

54 EC bonds (FY19) INE906B07GA2 5.75 30 June 2018 30 June 2023 3.14 IND AAA/Stable

54 EC bonds (FY19) INE906B07GB0 5.75 31 July 2018 31 July 2023 4.39 IND AAA/Stable

54 EC bonds (FY19) INE906B07GC8 5.75 31 August 2018 31 August 2023 3.48 IND AAA/Stable

54 EC bonds (FY19) INE906B07GD6 5.75 30 September 2018 30 September 2023 3.53 IND AAA/Stable

54 EC bonds (FY19) INE906B07GE4 5.75 31 October 2018 31 October 2023 3.60 IND AAA/Stable

54 EC bonds (FY19) INE906B07GF1 5.75 30 November 2018 30 November 2023 3.29 IND AAA/Stable

54 EC bonds (FY19) INE906B07GG9 5.75 31 December 2018 31 December 2023 4.03 IND AAA/Stable

54 EC bonds (FY19) INE906B07GH7 5.75 31 January 2019 31 January 2024 4.35 IND AAA/Stable

54 EC bonds (FY19) INE906B07GI5 5.75 28 February 2019 29 February 2024 4.30 IND AAA/Stable

54 EC bonds (FY19) INE906B07GJ3 5.75 31 March 2019 31 March 2024 8.93 IND AAA/Stable

Total 47.06

Taxable bonds (FY19) INE906B07GK1 8.55 28 June 2018 28 June 2048 21.95 IND AAA/Stable

Taxable bonds (FY19) INE906B07GL9 8.45 2 August 2018 2 August 2048 20.60 IND AAA/Stable

Taxable bonds (FY19) INE906B07GM7 8.19 21 December 2018 21 December 2028 20.55 IND AAA/Stable

Taxable bonds (FY19) INE906B07GN5 8.37 21 January 2019 21 January 2029 16.75 IND AAA/Stable

Taxable bonds (FY19) INE906B07GO3 8.49 5 February 2019 5 February 2029 20.00 IND AAA/Stable

Taxable bonds (FY19) INE906B07GP0 8.27 28 March 2019 28 March 2029 55.00 IND AAA/Stable

Taxable bonds (FY19) INE906B07GQ8

8.18 29 March 2019 28 March 2049 20.25 IND AAA/Stable

Total 175.1

54 EC bonds (FY20) INE906B07GR6 5.75 30 April 2019 30 April 2024 2.82 IND AAA/Stable

54 EC bonds (FY20) INE906B07GS4 5.75 31 May 2019 31 May 2024 3.76 IND AAA/Stable

54 EC bonds (FY20) INE906B07GT2 5.75 30 June 2019 30 June 2024 3.45 IND AAA/Stable

54 EC bonds (FY20) INE906B07GU0 5.75 31 July 2019 31 July 2024 4.72 IND AAA/Stable

54 EC bonds (FY20) INE906B07GV8 5.75 31 August 2019 31 August 2024 3.72 IND AAA/Stable

54 EC bonds (FY20) INE906B07GW6 5.75 30 September 2019 30 September 2024 3.11 IND AAA/Stable

54 EC bonds (FY20) INE906B07GX4 5.75 31 October 2019 31 October 2024 3.42 IND AAA/Stable

54 EC bonds (FY20) INE906B07GY2 5.75 30 November 2019 30 November 2024 3.49 IND AAA/Stable

54 EC bonds (FY20) INE906B07GZ9 5.75 31 December 2019 31 December 2024 3.67 IND AAA/Stable

54 EC bonds (FY20) INE906B07HA0 5.75 31January 2020 31January 2025 3.41 IND AAA/Stable

54 EC bonds (FY20) INE906B07HB8 5.75 29 February 2020 28 February 2025 3.97 IND AAA/Stable

Total 39.54

Taxable bonds (FY20) INE906B07HD4 8.60% 20 May 2019 20 May 2029 47.09 IND AAA/Stable

Taxable bonds (FY20) INE906B07HE2 8.36% 20 May2019 20 May 2026 34.2 IND AAA/Stable

Taxable bonds (FY20) INE906B07HF9 7.92% 06 June 2019 06 June 2029 39.3 IND AAA/Stable

Taxable bonds (FY20) INE906B07HG7 7.80% 26 June 2019 26 June 2029 43.65 IND AAA/Stable

Taxable bonds (FY20) INE906B07HH5 7.49% 01 August 2019 01 August 2029 46.02 IND AAA/Stable

Taxable bonds (FY20) INE906B07HI3 7.87% 09December 2019 09December 2034 30 IND AAA/Stable

Taxable bonds (FY20) INE906B07HJ1 7.98% 23December 2019 23December 2049 50 IND AAA/Stable

Taxable bonds (FY20) INE906B07HK9 7.54% 27 January 2020 27 January 2030 11 IND AAA/Stable

Taxable bonds (FY20) INE906B07HL7 7.27% 24 February 2020 24 February 2035 50 IND AAA/Stable

/

Taxable bonds (FY20) INE906B07HM5 7.48% 06 March 2020 06 March 2050 65 IND AAA/Stable

Taxable bonds (FY20) INE906B07HN3 7.52% 19 March 2020 19 March 2036 47.91 IND AAA/Stable

Total 464.17

Unutilised amount (FY20) 86.29 IND AAA/Stable

Unutilised amount (FY21) 650.00 IND AAA/Stable

In FY20, NHAI availed a loan of INR100 billion from the National Small Savings Fund and a term loan of INR60 billion from State Bank of India.

In FY19, NHAI availed a loan of INR200 billion from the National Small Savings Fund and a term loan of INR190 billion from State Bank of India.

In FY18, NHAI availed masala bonds of INR30 billion and INR200 billion from the National Small Savings Fund.

COMPLEXITY LEVEL OF INSTRUMENTS

For details on the complexity levels of the instruments, please visit https://www.indiaratings.co.in/complexity-indicators

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings hasbeen compensated for the provision of the ratings.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or securityor to undertake any investment strategy with respect to any investment, loan or security or any issuer.

ABOUT INDIA RATINGS AND RESEARCH

About India Ratings and Research: India Ratings and Research (Ind-Ra) is India's most respected credit rating agency committed to providing India'scredit markets accurate, timely and prospective credit opinions. Built on a foundation of independent thinking, rigorous analytics, and an open and balancedapproach towards credit research, Ind-Ra has grown rapidly during the past decade, gaining significant market presence in India's fixed income market.

Ind-Ra currently maintains coverage of corporate issuers, financial institutions (including banks and insurance companies), finance and leasing companies,managed funds, urban local bodies and project finance companies.

Headquartered in Mumbai, Ind-Ra has seven branch offices located in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Pune. Ind-Ra isrecognised by the Securities and Exchange Board of India, the Reserve Bank of India and National Housing Bank.

India Ratings is a 100% owned subsidiary of the Fitch Group.

For more information, visit www.indiaratings.co.in.

DISCLAIMER

ALL CREDIT RATINGS ASSIGNED BY INDIA RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS ANDDISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THETERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA,AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OFINTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCTSECTION OF THIS SITE.

Applicable Criteria

Analyst Names

Rating of Public Sector Entities

Primary Analyst

Bijoy Thomas

https://www.indiaratings.co.in/complexity-indicators

http://www.indiaratings.co.in/

https://www.indiaratings.co.in/rating-definitions

http://www.indiaratings.co.in/

https://www.indiaratings.co.in/Uploads/CriteriaReport/Rating%20of%20Public%20Sector%20Entities.pdf

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Senior Analyst India Ratings and Research Pvt Ltd DLF Epitome, Level 16, Building No. 5, Tower B DLF Cyber City, Gurgaon Haryana122002 0124 6687247

Secondary Analyst

Kunal Garg

Analyst

Committee Chairperson

Dr. Sunil Kumar Sinha

Principal Economist and Director Public Finance +91 124 6687255

Media Relation

Ankur Dahiya

Manager – Corporate Communication +91 22 40356121

ANNEXURE – 3 CONSENT OF THE TRUSTEE

ANNEXURE – 4

LIMITED REVIEW REPORT FOR MARCH 2019 AND SEPTEMBER 2019