Detailed Rationale

CRISIL Ratings has reaffirmed its ‘CRISIL AAA/Stable/CRISIL A1+’ ratings on the bank facilities of Cube Highways Trust (CHT).

 

CHT is an infrastructure investment trust (InvIT) of road sector assets sponsored by Cube Highways and Infrastructure Pte Ltd (CHI; ‘CRISIL AA/Stable’) and Cube Highways and Infrastructure III Pte Ltd (CH III; ‘CRISIL AA/Stable’). The InvIT has investments by funds, vehicles and/or entities managed and/or advised by Cube Highways and/or its affiliates (collectively Cube), with Cube Highways Fund Advisors Pvt. Ltd (CHFAPL) as its investment manager, Cube Highways and Transportation and Assets Advisors Pvt Ltd (CHTAAPL) as the project manager and Axis Trustee Services Ltd as the trustee.

 

CHT’s rating continues to reflect the strong and diversified portfolio of assets[1] in the trust. Overall toll collection of the portfolio grew 12% and 7% in fiscal 2024 and first 6 months of 2025, respectively, on-year, supported by healthy growth in traffic and toll rate hike. The portfolio has healthy revenue visibility, backed by operational track record of 8-15 years (barring assets belonging to the toll-operate-transfer bundle 3 [TOT 3] and hybrid annuity model [HAM] projects) as well as strong counterparty with 17 toll, six HAM and one annuity concession from the National Highways Authority of India (NHAI; ‘CRISIL AAA/Stable'). The geographically diversified portfolio and strategically located stretches strengthen the credit risk profile of CHT.

 

Healthy operating performance along with adequate leverage of 40% as on September 30, 2024 (refers to net debt to enterprise value and based on external valuation dated September 30, 2024) result in strong debt protection metrics. This is reflected in the CRISIL Ratings sensitised debt service coverage ratio (DSCR) remaining healthy around 1.75 times for fiscal 2024 and first 6 months of fiscal 2025. As a large part of the debt is at the trust level, debt servicing ability is strengthened by pooling of cash flow from all projects. Further, the trust is also stipulated to maintain a major maintenance reserve account (MMRA) equivalent to three months of major maintenance (MM) and debt service reserve account (DSRA) equivalent to three months of debt servicing obligations. The trust is in the process of replacing a part of its DSRA requirement (currently being maintained in the form of cash and equivalent), amounting to Rs 395 crore as on September 30, 2024, with a bank guarantee of Rs 150 crore, which is in line with the provisions of the financing agreements. Additionally, the financing agreements stipulate a cash trap if the DSCR falls below 1.25 times for trailing 12 months. All these factors cushion the trust’s liquidity.

 

CHT completed its acquisition of six HAM projects from Cube Highways and Infrastructure III Pte Ltd on December 3, 2024, as planned, increasing its stake to 100% in these assets from 51% earlier. The trust is presently in the process of adding one more toll asset in the portfolio – NAM Expressway Ltd (NAMEL). While leverage can be increased up to 60% after fulfilling regulatory requirements, i.e., six continuous distributions and maintenance of ‘AAA’ rating, as per the debt terms, it is expected to remain below 49% even post-acquisition of NAMEL.

 

The rating also derives strength from the experience of Cube in managing and maintaining road assets. These strengths are partially offset by susceptibility of toll revenue to volatility in traffic volume and development or improvement of alternate routes or alternate modes of transportation that could impact revenue and, in turn, DSCR. The DSCR will also remain susceptible to volatility in operations and maintenance (O&M) costs and interest rates. Nevertheless, the coverage indicators are likely to remain adequate in stress case scenarios as well.

[1]The trust currently has a portfolio of 24 assets (17 NHAI toll, one NHAI annuity and six NHAI HAM) and is in the process of acquiring one additional toll asset {Andhra Pradesh Road Development Corporation & Telangana State Road Development Corporation [APRDC & TSRDC] toll}.

Analytical Approach

CRISIL Ratings has combined the business and financial risk profiles of CHT, its underlying special purpose vehicles (SPVs) and proposed-to-be-acquired SPVs, in line with its criteria for rating entities in homogeneous groups. This is because the trust has / will have direct control over the SPVs and has infused / will infuse funds in them (in the form of loans [InvIT loan]) to repay debt (excluding SPV-level debt for Mahua Bharatpur Expressway Ltd [MBEL; rated ‘CRISIL AAA/Stable’] which shall continue). Furthermore, the SPVs will distribute their entire surplus cash flow to the InvIT in the form of interest and repayment (on InvIT loan) and dividend, leading to highly fungible cash flow. Also, as per the financing terms, the cap on borrowings has been defined at a consolidated level.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

• Geographically diversified portfolio with adequate track record and strong counterparty: The portfolio comprises 24 projects (excluding NAMEL, which is proposed to be acquired) and benefits from asset and geographical diversification. Additionally, all 24 projects have a strong counterparty, NHAI. The toll road projects have a long tolling track record of 8-15 years (except for nine assets belonging to TOT 3, which started tolling from October 2020). The annuity project has received 31 semi-annual annuities, while the HAM projects have received 5-6 semi-annual annuities each without any material deductions. All annuities have been received in a timely manner. CHT currently derives ~80% of its revenue from 17 toll projects, and the remaining from one annuity and six HAM projects.

 

All the assets are important routes connecting arterial cities, with most stretches being the shortest ones between these destinations, running through 11 states and Delhi, which together contribute 65-70% to India’s total gross state domestic product (GSDP). The portfolio has a good mix of commercial (54%) and passenger (46%) traffic at a consolidated level. While a few stretches have alternate routes, the risk is mitigated by their long tolling track record with the diversion risks already factored in the current collection numbers. CRISIL Ratings has adequately sensitised toll collections for risks emanating from foreseeable development of alternate routes or modes of transport.

 

Only two projects have balance concession life of less than three years, while the remaining assets have outstanding concessions of 7-26 years, which provides long-term revenue visibility. One asset is in the process of being added and the trust will continue to look for new opportunities for adding assets and further diversifying the portfolio over the medium term.

 

Overall toll collection of the portfolio grew 12% and 7% in fiscal 2024 and first 6 months of fiscal 2025, respectively, on-year, supported by healthy growth in traffic and toll rate hike.

 

Of the 17 toll projects, 13 have an annual toll rate escalation with fixed increase of 3% and a variable portion equal to only 40% change in wholesale price index (WPI), limiting dependence on WPI and supporting revenue. Five projects are linked directly to the WPI.

 

• Strong debt protection metrics, with provision for cash trap and creation of DSRA: The financial risk profile is expected to be healthy, supported by healthy toll collection, steady annuity receipts and adequate leverage of 40% as on September 30, 2024 (refers to net debt to enterprise value and based on external valuation dated September 30, 2024) resulting in strong debt protection metrics through the tenure of the debt. This is reflected in the CRISIL Ratings sensitised DSCR remaining healthy around 1.75 times for fiscal 2024 and first 6 months of 2025. As a large part of the debt is at the trust level, debt servicing ability is strengthened by pooling of cash flow from all projects. While leverage can be increased up to 60% after fulfilling regulatory requirements, i.e., six continuous distributions and maintenance of ‘AAA’ rating, as per the debt terms, it is expected to remain below 49% even post-acquisition of NAMEL.

 

Further, the trust is also stipulated to maintain DSRA equivalent to three months of debt servicing obligations. The trust is in the process of replacing part of its DSRA requirement (currently being maintained in the form of cash and equivalent), amounting to Rs 395 crore as on September 30, 2024, with a bank guarantee of Rs 150 crore, which is in line with provisions of the financing agreements. The debt terms also stipulate maintenance of cash equivalent to next three months of MM, which has been maintained. MMRA is being maintained in MBEL (Rs 18 crore as on June 30, 2024) in accordance with their financing agreements. Additional MMRA is to be created at InvIT level in fiscals 2026 to 2028, 2035 and 2040 for meeting expenditure in fiscals 2029 and 2030, 2036 and 2041, respectively, when significant MM is envisaged. Additionally, the financing agreements stipulate a cash trap if the DSCR falls below 1.25 times for trailing 12 months. All these factors cushion the trust’s liquidity. Any transfer to the distribution account will be made only after meeting the debt obligation and DSRA and MMRA requirement and testing of the financial covenants and meeting restricted payment conditions.

 

• Experienced management team: CHT will benefit from the strong asset management ability of Cube, which has extensive experience in the infrastructure space, including in India. The Cube Highways group has a well-equipped team of professionals to oversee road maintenance. Its senior management consists of experienced professionals with a deep understanding of technical specifications and advanced O&M methods to proactively tackle issues in road maintenance. This is further supported by the experienced finance and legal teams. 

 

Cube Highways started its India operations in fiscal 2015 and acquired five build-operate-transfer (BOT, four toll and one annuity) assets till 2018, with the remaining 14 acquired or awarded between fiscals 2020 and 2023 (including nine assets awarded under TOT bundle 3), and 18 of these transferred to CHT. Cube had also acquired six HAM assets in 2021 and 2022. In 2023, Cube Highways acquired another two BOT toll assets and has been awarded two TOT assets in 2024 by the NHAI. Cube Highways has a well-equipped team of professionals to manage roads and maintenance activities. It manages 29 road assets over 10,000 lane kilometre (km) in India.

 

Weaknesses:

• Susceptibility of toll revenue to volatility in traffic or development/improvement of alternate routes: The stretches remain vulnerable to variations in traffic volume owing to the seasonal variations in vehicular traffic, diversion of traffic to any alternate routes or development of alternative routes/modes. Susceptibility to economic downturns could adversely impact the traffic volumes on the project stretch. While the stretches face some threat from alternate routes as of now, improvement of existing alternate routes or development of new alternate routes may affect traffic further. While CRISIL Ratings has adequately sensitised toll collections for risks emanating from foreseeable development of alternate routes or alternate modes of transport, higher-than-expected diversion on account of any of these will be key rating sensitivity factor.

 

Toll collection is the only source of revenue, and hence, any volatility because of factors such as toll leakage, lack of timely increase in rates, fluctuation in WPI-linked inflation could adversely impact cash flow. Toll rate hike remained subdued in this fiscal due to low WPI. Force majeure events can impact cash flow and, consequently, debt protection metrics of the projects till the time these are resolved, and tolling is resumed. These risks are mitigated by remedies for force majeure events as defined in the concession agreement, however, these are typically in the form of extension of concession period and do not address possible cash flow mismatches during such events. In certain force majeure events, cash compensation is also available to the concessionaire as per the terms of the concession agreement.

 

• Susceptibility to volatility in O&M and MM costs and interest rates: The trust is exposed to risks related to maintenance of projects in the underlying SPVs as per the specifications and within budgeted costs. If the prescribed standards are not met, annuity payment may be reduced. Significant delay and deduction in annuities or significant dip in toll collection or unplanned maintenance activity could impact the debt servicing ability and will remain a rating sensitivity factor. Nonetheless, the extensive experience of the management should mitigate this risk and aid effective maintenance and avoidance of any structural damage to the road.

 

The term debt has a floating interest rate, with a three-month reset linked to the benchmark. This exposes the trust to volatility in interest rates. Although the cushion in the cash flow will help partially absorb the impact of such fluctuations, this remains a rating sensitivity factor.

Liquidity: Superior

Toll collection and annuity receipts will be adequate to meet operational expenses and debt repayment of Rs 1,600-1,700 crore per annum over the three fiscals through 2027. Furthermore, DSRA equivalent to three months of interest and principal obligation and maintenance of cash equivalent to next three months of MM expenses provides cushion. Liquidity will also be supported by the cash trap provision if DSCR falls below 1.25 times for the trailing 12 months.

Outlook: Stable

CRISIL Ratings believes CHT will continue to generate healthy toll revenue over the medium term, backed by good traffic potential on the project stretches and HAM/annuity assets will continue to benefit from timely receipt of semi-annual annuities.

Rating sensitivity factors

Downward factors

• Decline in revenue by 15% on sustained basis due to lower toll collections or higher-than-expected maintenance cost weakening the DSCR
• Higher-than-expected incremental borrowings or debt-funded acquisition without commensurate revenue potential impacting overall DSCR
• Non-maintenance of adequate liquidity reserve in the form of three-month DSRA and MMRA
• Non-adherence to the structural features of the transaction

About the CHT

CHT is registered as an irrevocable trust under Indian Trust Act, 1882, and as an InvIT under the Securities and Exchange Board of India (SEBI) InvIT Regulations, 2014, since April 22, 2022, and got listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in April 2023. CHT is sponsored by CH I and CH III, which is invested in by Cube and has acquired an initial portfolio of 18 operational projects with 17 toll and one annuity road. The trust has acquired 100% stake in six HAM assets in fiscal 2025. It will also acquire one operational toll project as well.

 

Cube is a Singapore-based company that invests in roads and highway projects and other select infrastructure sectors in India. It is an independent, professionally managed platform that leverages the extensive transportation experience of its management and execution advisory teams. Its shareholders are leading international investors, including I Squared Capital, Abu Dhabi Investment Authority and a consortium of Japanese investors (Japanese Highways International), which include Mitsubishi Corporation, Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development, East Nippon Expressway Company Ltd and Japan Expressway Company International Ltd. Canadian pension investment manager, British Columbia Investment Management Corporation (BCI) and the sovereign investor of Abu Dhabi, Mubadala Investment Company (Mubadala) have become the new anchor investors in CHT post its listing.

 

The broad details of the assets that are held by CHT are as follows:

 

APEL

The project operates a 75-km stretch between Kurnool and Kothakota on National Highway (NH) 44 (erstwhile NH 7) in Andhra Pradesh and Telangana under build-operate-transfer (BOT) annuity mode. The project has received 31 semi-annual annuities on time without any significant deduction so far and has balance concession life of around 2 years.

 

Western UP Tollway Pvt Ltd

The project is a 78-km four-lane operational toll road on NH 334 (erstwhile NH 58) connecting Meerut and Muzaffarnagar in Uttar Pradesh on a BOT toll basis. It has been operational since April 2011 with more than 12 years of tolling history. The project stretch operates under a 20-year concession awarded by NHAI in 2005 for strengthening and widening of the two-lane road to a four-lane divided carriageway and has remaining concession life of close to 1.5 years. Traffic rose at compound annual growth rate (CAGR) of 7.9% between fiscals 2019 and 2024. The project reported 12% increase in toll revenue on-year in fiscal 2024 and 1% decline in first 6 months of fiscal 2025 due to the impact of the general elections. It has no alternate routes currently, but an upcoming alternate route - Delhi Dehradun Expressway – is likely to start from fiscal 2026.

 

Jaipur-Mahua Tollway Pvt Ltd

The 109-km stretch is on the Jaipur Agra NH 21 (erstwhile NH 11) in Rajasthan under the BOT toll mode with 25-year concession, awarded by NHAI, after competitive bidding in 2005 for widening of the two-lane road to a four-lane divided carriageway. The project has been collecting toll since May 2009 and has remaining concession life of around seven years. Traffic registered a CAGR of 5.8% between fiscals 2019 and 2024. The project reported 18% and 9% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025, respectively, and has no alternate routes.

 

MBEL

The project is a 57-km stretch on the Jaipur Agra NH 21 (erstwhile NH 11) in Rajasthan under the BOT toll mode, linking Mahua to Bharatpur. Along with Jaipur-Mahua, it operates as a contiguous stretch of 166 km connecting two growing urban centres, Jaipur and Agra, on NH 11.

 

The project is a 25-year concession awarded by NHAI after competitive bidding in 2005 for widening of the two-lane road to a four-lane divided carriageway on a BOT toll basis. The project has been collecting toll since May 2009, with remaining concession life of around seven years. Traffic registered a CAGR of 4.1% between fiscals 2019 and 2024. The project reported 8% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025 and has no alternate routes.

 

Farakka Raiganj Highways Pvt Ltd

The project is a 100-km four-lane toll road connecting Farakka and Raiganj in West Bengal. It is a 30-year toll concession awarded by NHAI after competitive bidding in 2010 for widening of a two-lane highway to a four-lane configuration on a BOT toll basis. The project has been collecting toll since October 2016, with remaining concession life of close to 17 years. Traffic registered a CAGR of 5.7% between fiscals 2019 and 2024. The project reported 7% and 3% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025, respectively. The stretch has no major alternate routes.

 

Walayar Vadakkencherry Expressways Pvt Ltd

The project is a 53.5-km four-lane toll road connecting Walayar on the border of Tamil Nadu and Kerala. After competitive bidding in 2012, the project was awarded by NHAI as a 20-year concession for strengthening and widening a two-lane highway to a four-lane configuration on a toll basis. The project has been collecting toll since May 2015, with remaining concession life of close to nine years. Traffic registered CAGR of 8.3% between fiscals 2019 and 2024. The project reported 11% increase in toll revenue in fiscal 2024, however, topline declined by 1% in the first 6 months of fiscal 2025 due to reduction in the construction activity on one of the feeder routes. The stretch has no major alternate routes.

 

DA Toll Road Pvt Ltd

The project is a 179.5-km six-lane toll road connecting Delhi with Agra on NH 2. It is a 26-year toll concession granted in 2010 for strengthening and widening the four-lane highway to a six-lane configuration. The project has been collecting toll since October 2012 and has remaining concession life of close to 14 years. The project received provisional commercial operations date on May 19, 2022.

 

Traffic registered a CAGR of 10.6% between fiscals 2019 and 2024. The project reported 10% and 3% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are three existing alternate routes to the project road — two do not pose any threat, but the Yamuna Expressway provides an alternative route to users, however, it is an expensive alternate route and the diversion risk is already factored in the current collection numbers. Apart from this, there are two upcoming alternate routes, which could impact the traffic flow on the stretch – Delhi Mumbai Expressway and Ganga Expressway.

 

Nelamangala Devihalli Expressway Pvt Ltd

The project is an 80-km four-lane toll road connecting Nelamangala and Devihalli in Karnataka. It was awarded by NHAI as a 25-year concession for strengthening and widening a two-lane highway to a four-lane configuration on BOT toll basis. The project has been collecting toll since June 2012, with remaining concession life of close to nine years. Traffic registered a CAGR of 6.2% between fiscals 2019 and 2024. The project reported 14% and 12% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025, respectively. It has no alternate routes.

 

Hazaribagh Tollway Pvt Ltd

The project is a 73.8-km four-lane toll road connecting Hazaribagh to Ranchi in Jharkhand. It was awarded by NHAI as a 30-year concession as part of TOT 3 after competitive bidding in November 2019. Traffic registered a CAGR of 3.5% between fiscals 2021 and 2024. Toll revenue rose 20% and 21% on-year in fiscal 2024 and first 6 months of fiscal 2025, respectively, and has no major alternate routes. 

 

Jhansi Lalitpur Tollway Pvt Ltd

The project is a 49.7-km four-lane toll road in Uttar Pradesh. The road forms the first part of two contiguous stretches connecting Jhansi to Lalitpur. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 5.0% between fiscals 2021 and 2024. Toll revenue rose 10% and 11% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are no alternate routes to the project road currently, but there is one upcoming – Delhi-Mumbai Expressway.

 

Jhansi Vigakhet Tollway Pvt Ltd

The project is a 49.3-km four-lane toll road in Uttar Pradesh. The road forms the second part of two contiguous stretches connecting Jhansi to Lalitpur. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 4.6% between fiscals 2021 and 2024. Toll revenue increased 9% and 10% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are no alternate routes to the project road currently, but there is an upcoming alternate route to the stretch – Delhi-Mumbai Expressway.

 

Kotwa-Muzaffarpur Tollway Pvt Ltd

The project is an 80.0-km four-lane toll road connecting Kotwa to Muzaffarpur in Bihar. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of -1.4% between fiscals 2021 and 2024 due to improvement of minor alternate routes near the stretch, which has resulted in diversion of some local commercial traffic. Toll revenue increased 7% and 3% in fiscal 2024 and the first 6 months of fiscal 2025, respectively. Strengthening of another alternate route – Gorakhpur Siliguri Expressway (expected in fiscal 2030) may lead to diversion.

 

Lucknow Raebareli Tollway Pvt Ltd

The project is a 70.0-km four-lane toll road connecting Lucknow to Raebareli in Uttar Pradesh. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of -8.3% between fiscals 2021 and 2024 and toll revenue reduced by 2% in fiscal 2024 due to diversion of traffic (majorly long-route commercial) to the alternate routes (Lucknow-Varanasi section, Varanasi Outer Ring Road and Purvanchal Expressway). However, it increased by 2% in the first 6 months of fiscal 2025. There is an upcoming alternate route as well to the stretch – Ganga Expressway.

 

Madurai Kanyakumari Tollway Pvt Ltd

The project is a 52.3-km four-lane toll road in Tamil Nadu. The road forms the first part of four contiguous stretches connecting Madurai to Kanyakumari. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 5.5% between fiscals 2021 and 2024. Toll revenue increased by 13% and 5% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Kanyakumari Etturavattam Tollway Pvt Ltd

The project is a 64.2-km four-lane toll road in Tamil Nadu. The road forms the second part of four contiguous stretches connecting Madurai to Kanyakumari. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 4.8% between fiscals 2021 and 2024. Toll revenue increased 17% and 9% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Salaipudur Madurai Tollway Pvt Ltd

The project is a 63.5-km four-lane toll road in Tamil Nadu. The road forms the third part of four contiguous stretches connecting Madurai to Kanyakumari. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 5.4% between fiscals 2021 and 2024. Toll revenue rose 15% and 9% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Nanguneri Kanyakumari Tollway Pvt Ltd

The project is a 63.5-km four-lane toll road in Tamil Nadu. The road forms the fourth part of four contiguous stretches connecting Madurai to Kanyakumari. The project was awarded by NHAI as a 30-year concession as part of the TOT 3 bundle after competitive bidding in November 2019. Traffic registered a CAGR of 4.6% between fiscals 2021 and 2024. Toll revenue increased 9% and 3% in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Ghaziabad Aligarh Expressway Pvt Ltd

The project is a 125-km four-lane toll road connecting Ghaziabad to the Aligarh section of NH-91 in Uttar Pradesh. It is a 24-year toll concession awarded by NHAI after competitive bidding in 2010 for widening of a two-lane highway to a four-lane configuration on a BOT toll basis. The project has been collecting toll since fiscal 2016, with remaining concession life of close to 16 years (extension in concession period by 4.3 years due to lower-than-target traffic). Cube has undertaken six-laning of the project highway as stipulated in the concession agreement (CA). Around 92% work has been completed except for the hindrances for which extension is requested and of the budgeted cost of Rs 1030 crore, ~Rs 120 crore is to be paid out for the capex works as on March 31, 2024.

 

There are two existing alternate routes, and possible diversion has already happened with no further threat. However, there is an upcoming alternate route to the stretch - Ganga Expressway. Traffic registered a CAGR of 3.9% between fiscals 2019 and 2024. The project reported 19% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025.

 

Borgaon Watambare Highways Pvt. Ltd

It is a SPV incorporated on April 11, 2018, to undertake four-laning (from the existing two lanes) of the Sangli-Solapur (Borgaon to Watambare) section of NH-166 in Maharashtra on a design, build, operate and transfer (DBOT) basis under HAM with fixed operations period of 15 years from the COD. The total length of the road is 52.0 km and the pavement is rigid (concrete). The AD was received on April 22, 2019, and the project received an extension of 180 days owing to pandemic-related disruptions. The project received project completion certificate (PCC) on September 24, 2021, ahead of schedule. BWHPL has requested the NHAI for descoping, which will limit the total project length to 51.8 km. Approval for descoping is awaited from NHAI. It had a track record of receiving six annuities as on November 30, 2024.

 

Mangalwedha Solapur Highways Pvt Ltd

It is an SPV incorporated on April 11, 2018, to undertake four-laning (from existing two lanes) of the Sangli-Solapur (Mangalwedha to Solapur) section of NH-166 in Maharashtra on DBOT basis under HAM with fixed operations period of 15 years from COD. Total length of the road is 56.5 km and the pavement is rigid (concrete). After descoping, the length of the road is 55.8 km. The project received PCC on December 14, 2021. MSHPL had requested the NHAI for descoping, which will limit the total project length to 55.8 km. Final approval for descoping is awaited from NHAI. It had a track record of receiving five annuities as on November 30, 2024.

 

Mangloor Highways Pvt Ltd

The SPV has been granted a 17-year concession (including construction period of 730 days) by NHAI for the four-laning of 48.963 km of Mangalore to Telangana/Maharashtra border section of National Highway-161 in Telangana, on DBOT basis under HAM with fixed operations period of 15 years from COD. The project achieved PCOD on December 15, 2021, and had a track record of receiving five annuities as on November 30, 2024.

 

Srirangam Infra Pvt Ltd

It is an SPV formed to undertake four laning of the Trichy (0.00 km) to Kallagam (38.70 km) section of the NH-227 in Tamil Nadu, under Bharatmala Pariyojana (residual projects under the NHDP) on HAM basis with fixed operations period of 15 years from COD. The total project length is 38.70 km. The project achieved provisional completion (PCC I) on May 30, 2021, for 27.3 km, PCC II on June 24, 2022 for 9.830 km, and PCC III on March 31, 2023 for 1.57-km balance stretch. The project received final COD on June 15, 2023 and had a track record of receiving six annuities as on November 30, 2024.

 

Tirumala Highways Pvt Ltd

It is an SPV incorporated on April 13, 2018, to undertake six-laning (from the existing two lanes) of the Chittoor-Mallavaram section of NH -140 in Andhra Pradesh on DBOT basis under HAM with fixed operations period of 15 years from COD. The total length of the road to be developed was 61.128 km, of which 60.538 km has been completed and the remaining descoped. The pavement is flexible (bitumen). The project received PCOD on May 10, 2021, ahead of schedule and has received final COD on June 8, 2023. It had a track record of receiving six annuities as on November 30, 2024.

 

Shankarampet Projects Pvt Ltd

It is an SPV formed to undertake four-laning of NH-161 from Ramsanpalle village (design km 39.980/existing km 44.757) to Mangloor village (design km 86.788/existing km 91.350) in Telangana under HAM with fixed operations period of 15 years from the COD. The total project length is 46.808 km. The project achieved PCOD on October 5, 2021, and COD on June 21, 2022, and had a track record of receiving six annuities as on November 30, 2024.

 

The broad details of the asset proposed to be acquired by CHT are as follows:

 

NAM Expressway Ltd 

It operates the 212 km (204.8 km operational and rest under-construction), four-lane road stretch on State Highway-2 between Andhra Pradesh and Telangana, connecting Narketpally and Medarametla. The project was awarded after competitive bidding in 2010 with a concession period of 24 years. The project has a well-established operational history of collecting tolls since March 2014 and has a remaining life of 11 years. Traffic registered a CAGR of 4.3% between fiscals 2019 and 2024. The project reported 6% and 9% increase in toll revenue in fiscal 2024 and first 6 months of fiscal 2025, respectively. There are no existing alternate routes, but there is an upcoming alternate route to the stretch - Surat- Solapur- Chennai Expressway.

Key Financial Indicators^

Particulars	Unit	2024	2023*
Revenue	Rs crore	2920	NA
Profit after tax (PAT)	Rs crore	(706)	NA
PAT margin	%	(24.2)	NA
Adjusted debt/adjusted networth	Times	0.83	NA
Adjusted interest coverage	Times	2.11	NA

^CRISIL Ratings adjusted financials

*Financial indicators not meaningful, as CHT was incorporated in April 2022 and assets were acquired in April 2023

Annexure – List of entities consolidated

S.No	Name of company	Type of consolidation	Rationale for consolidation
1	Andhra Pradesh Expressway Ltd	Full	100% subsidiaries
2	Western UP Tollway Pvt Ltd	Full
3	Jaipur-Mahua Tollway Pvt Ltd	Full
4	Mahua-Bharatpur Expressways Ltd*	Full
5	Farakka Raiganj Highways Pvt Ltd	Full
6	Walayar Vadakkencherry Expressways Pvt Ltd	Full
7	DA Toll Road Pvt Ltd	Full
8	Nelamangala Devihalli Expressway Pvt Ltd	Full
9	Hazaribagh Tollway Pvt Ltd	Full
10	Jhansi Lalitpur Tollway Pvt Ltd	Full
11	Jhansi Vigakhet Tollway Pvt Ltd	Full
12	Kotwa-Muzaffarpur Tollway Pvt Ltd	Full
13	Lucknow Raebareli Tollway Pvt Ltd	Full
14	Madurai Kanyakumari Tollway Pvt Ltd	Full
15	Kanyakumari Etturavattam Tollway Pvt Ltd	Full
16	Salaipudur Madurai Tollway Pvt Ltd	Full
17	Nanguneri Kanyakumari Tollway Pvt Ltd	Full
18	Ghaziabad Aligarh Expressway Pvt Ltd	Full
19	Borgaon Watambare Highways Pvt. Ltd.	Full
20	Mangalwedha Solapur Highways Pvt. Ltd.	Full
21	Mangloor Highways Pvt. Ltd.	Full
22	Srirangam Infra Pvt. Ltd.	Full
23	Tirumala Infra Pvt. Ltd.	Full
24	Shankarmpet Projects Pvt. Ltd.	Full
25	NAM Expressway Ltd	Full	will become 100% subsidiary

*99.97% shareholding by CHT