India Ratings and Research (Ind-Ra) opines that the FY24 union budget’s announcement of nil borrowings by the National Highways Authority of India (NHAI) would hasten the deleveraging of its balance sheet, a process that has commenced in FY23.

FY23 was the first year in more than a decade when the NHAI’s debt started witnessing a yoy contraction.

India Ratings and Research (Ind-Ra) opines that the FY24 union budget’s announcement of nil borrowings by the National Highways Authority of India (NHAI) would hasten the deleveraging of its balance sheet, a process that has commenced in FY23. In fact, FY23 was the first year in more than a decade when the NHAI’s debt started witnessing a yoy contraction.

The NHAI’s debt had spiralled to Rs.3.48 trillion in FY22  from  INR68 billion in FY11 owing to substantial expansion of highway construction, which was predominantly debt-funded. However, in FY23, post the substantial increase in budgetary allocation along with minimal dependence on market borrowings, the debt at NHAI fell to a level of Rs.3.44 trillion as on 30 September 2022.

As the existing repayment commitments mainly consist of interest expenses, any meaningful reduction in debt would be visible only gradually.