The ministry of road transport and highways is confident of achieving its internal and extra-budgetary resources (IEBR) target of Rs 3,600 crore this fiscal, despite the lukewarm response to National Highways Authority of India's (NHAI) recently concluded second 'tax free' bond issue, which could garner only Rs 163 crore as against Rs 500 crore raised from its maiden bond issue.
"NHAI's IEBR target of Rs 3,600 crore for 2001-02 will not be scaled down despite the not-so-encouraging response to its second privately-placed capital gains exempt bond issue," a ministry official said.
The important thing is to stay in the market throughout the year, so as to readily tap the people who want to invest in bonds offering capital gains exemption, an NHAI official said. We are absolutely confident of achieving the market borrowing target for the year, he added.
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According to officials, the recent downward slide in the stock market and the following crisis had an adverse impact on the subscription to the issue, which was available on-tap basis and was expected to garner around Rs 500 crore.
Despite being exempt from long-term capital gains under section 54 EC of the Income-Tax Act, the issue, which carried a coupon rate of 9.25 per cent and had been given a 'AAA' safety rating by Crisil, did not evoke the "desired response" from investors because of the reverses in the capital markets, officials said.
NHAI plans to raise Rs 13,800 crore through market borrowing programmes spread over the next four years for part-financing the ongoing Rs 54,000 crore National Highway Development Project (NHDP).
Of this, Rs 3,600 crore is targetted for the current financial year, with Rs 6,200 crore slated to be raised in 2002-03 and the balance proposed to be raised in the following fiscal year.
Incidentally, the increase in the total outlay for the ministry of roads and highways for 2001-02 was almost entirely on account of the Rs 3,600 crore that NHAI plans to raise from the debt market during the financial year, the proceeds of which will be used to part-finance the ongoing Rs 54,000 crore National Highways Development Project (NHDP).