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Varanasi-Aurangabad NH-2 Tollway Private Limited (VAH) has successfully raised INR 2,630 crore (USD 316.3 million) through dollar-denominated bonds, marking the first such issuance by an Indian road concession entity. The bonds, maturing in nine years with a 5.9% interest rate, were heavily oversubscribed, attracting INR 27,500 crore in orders from 144 global investors. VAH, owned by ROADIS under PSP Investments, operates the 192 km six-lane highway. This milestone highlights investor confidence in India's infrastructure sector and will support refinancing, expansion, and maintenance, strengthening connectivity and economic growth along the Varanasi-Aurangabad corridor.
Varanasi-Aurangabad NH-2 Tollway Private Limited (VAH) has managed to raise INR 2,630 crore (USD 316.3 million) in dollar-denominated bonds in international capital markets successfully. This marks the first instance of an Indian road concession entity raising such debt and also an investment-grade credit rating from Moody's and Fitch credit rating agencies. The company operates the six-laning, operation, and maintenance of the 192 km Varanasi-Aurangabad Highway. Advertisement
The bonds, carrying a 5.9% interest rate and maturing in almost nine years, have been issued to facilitate refinancing and capital expenditure needs. The issue attracted substantial overseas investor interest, with the order book aggregating INR 27,500 crore-showing an oversubscription of around 10.4 times. 144 investors from the major global markets subscribed to the issue. Deutsche Bank acted as the sole global coordinator for the transaction.
The VAH project is operated by ROADIS, a highway asset company in India. VAH is owned entirely by the ROADIS Group, which is the road investment platform of PSP Investments, a Canadian pension fund manager.
The Varanasi-Aurangabad NH-2 highway has been an important transport artery, supporting trade and connectivity between major economic zones. The six-lane widening project was undertaken to support rising traffic volumes and enhance road safety. Previously, infrastructure development in India was hindered by funding issues, with local funding frequently falling short for massive highway development.
VAH's dollar-denominated bond issue success is a milestone in Indian infrastructure finance, reflecting investor confidence in the road sector of India. As the project progresses, this funding is anticipated to fund continued expansion, operations, and maintenance activities, further enhancing connectivity and economic development along the Varanasi-Aurangabad corridor.
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