Highways authority NHAI clears Rs 15,700 crore debt, saves Rs 1,000 crore interest; check out key takeaways

In a big step towards lowering its overall debt liability, the National Highways Authority of India (NHAI) successfully paid off loans amounting to Rs 15,700 crore ahead of schedule, the Ministry of Road Transport & Highways said on Tuesday. Retiring the debt ahead of schedule will result in estimated interest savings to the tune of Rs 1,000 crore. With this pre-payment, NHAI's outstanding debt liability came down to around Rs 3.2 lakh crore.

Here are some key takeaways from this development: 

• NHAI - the authority entrusted with the task of developing, maintaining and managing the National Highways across the country - aims to monetise projects worth Rs 15,000-20,000 crore through Infrastructure Investment Trusts (InvIT) in the current financial year. 
• This translates to a rise of as much as 27.4 per cent over the sum of Rs 15,700 crore generated through this route in FY24, which ended on March 31, 2024.
• As per rules, the proceeds out of InvIT monetisation activities are meant to be exclusively used for NHAI debt repayment.
• The Rs 15,000-20,000 crore target could bring down the highways authority's overall debt liability to around Rs 3 lakh crore by the end of FY25, according to the ministry. 
• NHAI has been actively engaging with its lenders in a bid to reduce the applicable interest rates. As a result, banks have lowered their interest rates from 8.00-8.10 per cent to 7.58-7.59 per cent. 
• In this process, bank loans where interest rates could not be reduced have been repaid Rs 15,700 crore, which will result in significant interest savings of around Rs 1,000 crore, it added.