National Highways Authority of India (NHAI) £1.9B Public Bond Offering
M. V. Kini & Co. advised National Highways Authority of India (NHAI) on public issue of tax free Bonds of the value of Rs.1,000 each to raise Rs.10,000 crore ($ 1.9 billion) to finance implementation of various projects.
The NHAI was constituted by an act of Parliament, the National Highways Authority of India Act, 1988. It is responsible for the development, maintenance and management of National Highways entrusted to it and for matters connected or incidental therto. The Authority was made operational in 1995.
The team was spearheaded by Managing Attorney Ravi Kini and Partner Sumit Gupta along with Principal Associates Vidisha Krishan, Ashish Suman and Nilesh Chandra; Senior Associate Shailendra Somvanshi and Associates Shailender Sharma, Puneet Parihar, Harkirat Singh.
The bonds carry a interest at the rate of 8.2 per cent on 10-year maturities and 8.3 per cent on 15-year maturities. The coupon rate on these bonds is not taxable, and should not be less than 50 basis points lower than the yield on government securities of the same residual maturity.
NHAI has mandated SBI Capital Markets Limited, A.K. Capital Services Limited, ICICI Securities Limited, Kotal Mahindra Bank Limited as the lead managers for the bond issue. NHAI plans to use the proceeds raised from the bonds issue to part fund various national highways projects under different government schemes.
In the 2011-12 Union Budget authorization was given to NHAI, Housing Urban Development Corporation (Hudco), Indian Railway Finance Corporation (IRFC) and Power Finance Corporation (PFC) to raise Rs 30,000 crore through tax-free bonds.
NHAI was advised by M.V. Kini & Co. in capacity of legal advisor to the Issue. MV Kini & Co has particular expertise in infrastructure, banking and project finance areas. With clients such as the Punjab National Bank and the Bank of Baroda, the firm provides advice for a range of entities including various government authorities.
MV Kini & Co. was ranked 2nd in Public Debt Offer by Prime: The Primary Market Monitor in its ranking for APRIL 2008 to DECEMBER 2011
Legal Adviser to NHAI
Managing Attorney Ravi Kini commented:
“With this public issue, NHAI has launched its first ever tax-free bonds issue of Rs. 10,000 crore. Allotment has been done on first come first serve basis for Category I and II investors and on proportionate basis for Category III investors.”