The National Highways Authority of India (NHAI) is likely to issue tax-free bonds worth around Rs 5,000 crore in the first quarter of the next financial year to part fund land acquisition and annuity payments among others.
“The government will allow us to raise tax-free bonds worth Rs 10,000 crore in 2011-12. We will raise the fund in two tranches and expect to issue the first tranche of around Rs 5,000 crore in the first quarter of the next financial year,” NHAI Member (Finance) J N Singh told PTI.
Finance Minister Pranab Mukherjee in his Budget 2011-12 had said the government would allow NHAI to raise tax-free bonds worth Rs 10,000 crore in 2011-12. Singh said the fund would be used for acquisition of land, meeting the viability gap funding and committed annuity payments among others.
The second tranche would be issued in the last quarter of 2011-12, depending upon the market conditions, he added. “This is certainly a very good step and will allow us to go for cheaper finances. We expect the costs to go down by 2 per cent to about 7 per cent on present market conditions,” he said.
The tax-free bonds proposed in the Budget are for long-term financing.
