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.

 

Overall toll collection of the portfolio grew 24% and 12% in fiscals 2023 and 2024, respectively, on-year, supported by healthy growth in traffic and toll rate hike. The debt service coverage ratio (DSCR) is estimated to be healthy at above 1.6 times for fiscal 2024 (CRISIL Ratings sensitised ratio, excluding earnout payments to erstwhile sellers which are expected to be funded from cash balance).

 

CHT’s rating continues to reflect the strong and diversified portfolio of assets[1] in the trust. Apart from the existing 18 assets, the trust is in the process of adding seven more assets in the portfolio – six hybrid annuity model (HAM) projects and one toll asset. The portfolio has healthy revenue visibility, supported by operational track record of 7-14 years (barring assets belonging to the toll-operate-transfer bundle 3 [TOT 3] and HAM projects) as well as strong counterparty with 17 toll, six HAM and one annuity concession from National Highways Authority of India (NHAI; ‘CRISIL AAA/Stable'). The geographically diversified portfolio and strategically located stretches strengthen the credit risk profile of CHT. Along with adequate leverage, these will result in strong debt protection metrics. As a large part of debt is at the trust level, debt servicing ability will be strengthened by pooling of cash flow from all projects. As per the terms, debt is expected to be capped at 49% of the valuation of the trust currently and it can be increased up to 60% after fulfilling regulatory requirements, i.e., six continuous distributions and maintenance of ‘AAA’ rating. Additionally, the trust is also stipulated to maintain a debt service reserve account (DSRA) equivalent to three months of debt servicing obligations and a major maintenance reserve account (MMRA) equivalent to three months of major maintenance (MM). Furthermore, cash trap will be triggered if the DSCR falls below 1.25 times for trailing 12 months. All these factors cushion the trust’s liquidity. 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 18 assets (17 NHAI toll and one NHAI annuity) and is in the process of acquiring seven additional assets {six NHAI HAM and one 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’] and Andhra Pradesh Expressway Ltd [APEL] 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 25 projects and benefits from asset and geographical diversification. Additionally, 24 out of 25 projects have a strong counterparty, NHAI. The toll road projects have a long tolling track record of 7-16 years (except for nine assets belonging to TOT 3, which started tolling from October 2020). The annuity project has received 30 semi-annual annuities, while the HAM projects have received 4-5 semi-annual annuities each without any material deductions. All annuities have been received in a timely manner. CHT will derive80% of its revenue from 18 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 (55%) and passenger (45%) 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 23 assets have remaining concessions of 7-26 years which provides long-term revenue visibility. Seven assets are 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.

 

Of the 18 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.

 

In fiscal 2023 and fiscal 2024, only one stretch, Lucknow Raebareli Tollway Ltd (LRTL, contributing ~2% to the overall yearly toll collection of the InvIT) reported decline of 2-5 % in toll collection while all other stretches reported healthy growth, supported by significant increase in toll rates and traffic. Toll collection declined in LRTL due to diversion of traffic (majorly long-route commercial) to alternate routes – Lucknow-Varanasi section, Varanasi Outer Ring Road and Purvanchal Expressway. Overall toll collection of the portfolio grew 24% and 12% in fiscal 2023 and 2024, respectively, on-year.

 

• Strong debt protection metrics, with provision for cash trap and creation of DSRA: The financial risk profile is expected to be healthy, supported by comfortable DSCR through the tenure of the debt given healthy toll collection, steady annuity receipts and moderate leverage. The DSCR is estimated to be healthy at above 1.6 times for fiscal 2024 (CRISIL Ratings sensitised ratio, excluding earnout payments to erstwhile sellers which are expected to be funded from cash balance). While debt will increase by around Rs 4,500 crore, post the acquisition of tranche II assets, the leverage will remain comfortable at below 49% in line with debt cap stipulated in the financial agreements.

 

The debt terms also require adequate liquidity cushion in the form of three months of DSRA which has been created and maintenance of cash equivalent to next three months of MM which  has been maintained. MMRA is being maintained in APEL (Rs 80 crore as on March 31, 2024) and MBEL (Rs 36 crore as on March 31, 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. 

 

A cash trap is stipulated if DSCR falls below 1.25 times. 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.

 

As per the InvIT guidelines, debt must not exceed 49% of the asset value (until six consecutive dividend distributions). The portfolio including tranche II debt is estimated to have leverage below 49%.

 

• 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 toll-operate-transfer [TOT] bundle 3), and 18 of these transferred to CHT. Cube had also acquired six HAM assets in 2021 and 2022. In 2023 and 2024, Cube Highways acquired another BOT toll asset and was awarded two TOT bundles with 3 assets by NHAI. Cube Highways has a well-equipped team of professionals to manage roads and maintenance activities. It manages 30 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: Toll collection is susceptible to volatility because of competing routes, lack of timely increase in toll rates, fluctuations in WPI-linked inflation, seasonal variations in vehicular traffic and economic downturns. For instance, traffic and toll collection was affected by government policies such as demonetisation in fiscal 2017, the nationwide lockdown in fiscal 2021 to curb the spread of Covid-19 pandemic and, more recently, the temporary hold on toll rate hike which was to be implemented from April 1, 2024.

 

While a few stretches have existing alternate routes, the risk is mitigated by their long tolling track record with the diversion risks already factored in the current collection numbers. Although CRISIL Ratings has adequately sensitised toll collection for risks emanating from foreseeable development of alternative routes or alternative modes of transport, higher-than-expected diversion will be a key rating sensitivity factor.

 

• 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 the 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 1,700-1,800 crore 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.

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 Company

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 will acquire seven operational projects – six HAM and 1 toll road as part of tranche II.

 

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 BOT annuity mode. The project has received 30 semi-annual annuities on time without any material deduction so far and has balance concession life of around two years.

 

Western UP Tollway 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 three years. Traffic rose at compound annual growth rate (CAGR) of 9.7% between fiscals 2016 and 2023. The project reported 45% and 12% increase in toll revenue on-year in fiscals 2023 and 2024, respectively. It has no alternate routes currently, but an upcoming alternate route - Delhi Dehradun Expressway – is likely to start from fiscal 2026.

 

Jaipur-Mahua Tollway 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 CAGR of 8.9% between fiscals 2016 and 2023. The project reported 20% and 18% increase in toll revenue in fiscal 2023 and fiscal 2024, 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 11.5% between fiscals 2016 and 2022. The project reported 23% and 8% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively, and has no alternate routes.

 

Farakka Raiganj Highways 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 9.5% between fiscals 2018 and 2023. The project reported 11% and 7% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively, and 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 23.1% between fiscals 2016 and 2023. The project reported 47% and 11% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively, and has no 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 operation date on May 19, 2022.

 

Traffic registered CAGR of 21.6% between fiscals 2016 and 2023. The project reported 33% and 10% increase in toll revenue in fiscal 2023 and fiscal 2024, 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 CAGR of 9.9% between fiscals 2016 and 2023. The project reported 27% and 14% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively. It has no alternate routes.

 

Hazaribagh Tollway 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 increased 7% in 2023, and toll revenue rose 16% and 20% on-year in fiscal 2023 and fiscal 2024, respectively, and has no major alternate routes. 

 

Jhansi Lalitpur Tollway 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 increased 11% in 2023, and toll revenue rose 22% and 10% in fiscal 2023 and fiscal 2024, respectively. There are no alternate routes to the project road currently, but there is an upcoming alternate route to the stretch - Delhi-Mumbai Expressway.

 

Jhansi Vigakhet Tollway 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 rose 11% in 2023, and toll revenue increased 22% and 9% in fiscal 2023 and fiscal 2024, 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 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 rose 3% in 2023, and toll revenue increased 13% and 7% in fiscal 2023 and fiscal 2024, respectively. There is a shorter alternate route (state highway 74), but it passes through a congested network and is unlikely to impact traffic on the project stretch. Strengthening of another alternate route – Gorakhpur Siliguri Expressway (expected in fiscal 2030) may lead to diversion.

 

Lucknow Raebareli Tollway 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 declined 10% in 2023 and toll revenue reduced by 5% and 2% in fiscal 2023 and fiscal 2024, respectively, due to diversion of traffic (majorly long-route commercial) to the alternate routes (Lucknow-Varanasi section, Varanasi Outer Ring Road and Purvanchal Expressway). There is an upcoming alternate route as well to the stretch – Ganga Expressway.

 

Madurai Kanyakumari Tollway 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 rose by 18% in 2023 and toll revenue increased by 31% and 13% in fiscal 2023 and fiscal 2024, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Kanyakumari Etturavattam Tollway 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 rose by 18% in 2023 and toll revenue increased 28% and 17% in fiscal 2023 and fiscal 2024, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Salaipudur Madurai Tollway 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 rose by 20% in 2023 and toll revenue rose 32% and 15% in fiscal 2023 and fiscal 2024, respectively. There are alternate routes for Kerala and Thoothukudi port-bound traffic, and possible diversion has already happened.

 

Nanguneri Kanyakumari Tollway 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 rose by 23% in 2023 and toll revenue increased 35% and 10% in fiscal 2023 and fiscal 2024, 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 CAGR of 6.1% between fiscals 2016 and 2023. The project reported 13% and 19% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively.

 

The broad details of the assets that are 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/awaiting completion certificate from NHAI), four-lane road stretch on State Highway-2 between the states of 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 CAGR of 8.7% between fiscals 2016 and 2023. The project reported 29% and 6% increase in toll revenue in fiscal 2023 and fiscal 2024, respectively. There are no existing alternate routes, but there is an upcoming alternate route to the stretch - Surat- Solapur- Chennai Expressway.

 

Borgaon Watambare Highways Pvt. Ltd (rated ‘CRISIL AAA/Stable’)

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 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 five annuities as on March 31, 2024.

 

Mangalwedha Solapur Highways Pvt Ltd (MSHPL; rated ‘CRISIL AAA/Stable’)

It is a 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 a design, build, operate and transfer basis under HAM with fixed operations period of 15 years from the 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 four annuities as on March 31, 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 the state of Telangana, on a design, build, operate and transfer basis under HAM with fixed operations period of 15 years from the COD. The project achieved PCOD on December 15, 2021, and had a track record of receiving four annuities as on March 31, 2024.

 

KNR Srirangam Infra Pvt Ltd

It is an SPV formed to undertake four laning of the Trichy (0.00km) to Kallagam (38.70km) 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 the COD. The total project length is 38.70 kms. 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 five annuities as on March 31, 2024.

 

KNR Tirumala Infra Pvt Ltd (rated ‘CRISIL AAA/Stable’)

It is a 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 design, build, operate and transfer basis under HAM with fixed operations period of 15 years from the 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 five annuities as on March 31, 2024.

 

KNR Shankarmpet 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 kms. The project achieved PCOD on October 5, 2021, and COD on June 21, 2022, and had a track record of receiving four annuities as on March 31, 2024.

Key Financial Indicators

Particulars	Unit	2023	2022
Revenue	Rs crore	NA	NA
Profit After Tax (PAT)	Rs crore	NA	NA
PAT Margin	%	NA	NA
Adjusted debt/adjusted networth	Times	NA	NA
Adjusted interest coverage	Times	NA	NA

*Financial indicators not meaningful, as CHT was incorporated in April 2022 and assets 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 consolidation	100% subsidiaries
2	Western UP Tollway Ltd	Full consolidation
3	Jaipur-Mahua Tollway Ltd	Full consolidation
4	Mahua-Bharatpur Expressways Ltd*	Full consolidation
5	Farakka Raiganj Highways Ltd	Full consolidation
6	Walayar Vadakkencherry Expressways Pvt Ltd	Full consolidation
7	DA Toll Road Pvt Ltd	Full consolidation
8	Nelamangala Devihalli Expressway Pvt Ltd	Full consolidation
9	Hazaribagh Tollway Ltd	Full consolidation
10	Jhansi Lalitpur Tollway Ltd	Full consolidation
11	Jhansi Vigakhet Tollway Ltd	Full consolidation
12	Kotwa-Muzaffarpur Tollway Ltd	Full consolidation
13	Lucknow Raebareli Tollway Ltd	Full consolidation
14	Madurai Kanyakumari Tollway Ltd	Full consolidation
15	Kanyakumari Etturavattam Tollway Ltd	Full consolidation
16	Salaipudur Madurai Tollway Ltd	Full consolidation
17	Nanguneri Kanyakumari Tollway Ltd	Full consolidation
18	Ghaziabad Aligarh Expressway Pvt Ltd	Full consolidation
19	Borgaon Watambare Highways Pvt. Ltd.	Full consolidation	Will become 100% subsidiaries in one or more tranches
20	Mangalwedha Solapur Highways Pvt. Ltd.	Full consolidation
21	Mangloor Highways Pvt. Ltd.	Full consolidation
22	KNR Srirangam Infra Pvt. Ltd.	Full consolidation
23	KNR Tirumala Infra Pvt. Ltd.	Full consolidation
24	KNR Shankarmpet Projects Pvt. Ltd.	Full consolidation
25	NAM Expressway Ltd	Full consolidation

*99.97% shareholding by CHT