The central government is planning to buy back National Highway Authority’s (NHAI) bonds worth Rs 500-700 billion to reduce NHAI’s debt from Rs 3.35 trillion to Rs 1 trillion. Discussions have been initiated with bondholders, including the State Bank of India, Punjab National Bank, ICICI Bank, and major mutual funds. The identified bonds include 7.11 per cent, 7.29 per cent, and 8.3 per cent AAA-rated bonds maturing between 2025 and 2027.
The buyback aligns with the government’s strategy to cap capital expenditure in road construction and shift focus toward public-private partnership projects, which have proven more cost-effective. The move is part of the Ministry of Road Transport and Highway’s efforts to reallocate its Rs 2.78 trillion budget for 2024-25, reducing NHAI’s debt and import dependence on road equipment. Despite rising budget allocations, the government is encouraging private investment in highway projects, targeting 15 new projects worth Rs 440 billion under the build-operate-transfer model.