Anantam Highways Trust Receives Final AAA Credit Rating from ICRA for ₹2,157 Crore
ICRA Limited has finalized the provisional [ICRA]AAA (Stable) rating for Anantam Highways Trust's ₹2,157.09 crore term loan facility while withdrawing the rating for ₹1,142.91 crore, adding to the Trust's existing IND AAA/Stable rating from India Ratings. The rating reflects strong operational performance across seven HAM highway projects with NHAI as counterparty, robust debt coverage metrics above 1.7 times DSCR, and diversified asset portfolio with established annuity receipt track records.
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Anantam Highways Trust , a newly established infrastructure investment trust (InvIT), has achieved another significant milestone with ICRA Limited finalizing its provisional credit rating to [ICRA]AAA (Stable) for its term loan facility. This development follows the Trust's earlier achievement of IND AAA/Stable rating from India Ratings and Research, reinforcing its strong credit profile in the highway infrastructure sector.
ICRA Rating Finalization
ICRA Limited has finalized the provisional rating for Anantam Highways Trust's term loan facility following the successful completion of asset transfers and debt arrangements. The rating action reflects the Trust's operational asset portfolio and robust financial structure.
| Rating Details: | Specifications |
|---|---|
| Previous Rated Amount: | ₹3,300.00 crore |
| Finalized Amount: | ₹2,157.09 crore |
| Withdrawn Amount: | ₹1,142.91 crore |
| Rating: | [ICRA]AAA (Stable) |
| Rating Action: | Provisional rating finalized |
The finalization takes into consideration that key borrowing terms align with terms indicated during provisional rating assignment, with no fundamental change in the Trust's credit profile. The withdrawal of the provisional rating for the residual debt follows ICRA's withdrawal policy as no amount was raised against the rated instrument.
Asset Portfolio Performance
The Trust operates seven highway Special Purpose Vehicles (SPVs) under the hybrid annuity model (HAM) framework with National Highways Authority of India (NHAI) as counterparty. The asset portfolio demonstrates strong operational performance with established annuity receipt track records.
| Operational Status: | Details |
|---|---|
| Total Projects: | 7 Highway SPVs |
| Final COD Achieved: | 3 projects (RHL, NPHL, DBHL) |
| Provisional COD: | 4 projects |
| Annuity Track Record: | Minimum 3 annuities received |
| Average Payment Delay: | Less than one month |
The projects include Dodaballapur Hoskote Highways Limited, Repallewada Highways Limited, Narenpur Purnea Highways Limited, Dhrol Bhadra Highways Limited, Bangalore Malur Highways Limited, Malur Bangarpet Highways Limited, and Villupuram Highways Limited. No single asset contributes more than 21% of total inflows, ensuring portfolio diversification.
Credit Strengths and Risk Assessment
ICRA's rating favorably factors the steady revenue profile supported by HAM projects' inherent benefits with strong counterparty NHAI. The rating considers robust debt coverage metrics with estimated cumulative debt servicing coverage ratio (DSCR) above 1.7 times under base case assumptions.
| Financial Metrics: | Performance |
|---|---|
| Cumulative DSCR: | Above 1.7 times |
| Net Debt to Enterprise Value: | ~41% (listing date) |
| DSRA Maintenance: | 3 months coverage |
| Tail Period: | 1 year 5 months |
| Free Cash Balance: | ₹105.00 crore |
The Trust benefits from cash flow pooling across SPVs, ensuring pooled cash flows are available for meeting regular maintenance expenses and debt servicing obligations. SEBI InvIT regulations restrict leverage at Trust level, with net debt to enterprise value expected to remain below 49%.
Risk Factors and Mitigation
The rating acknowledges risks inherent in HAM projects related to potential delayed receipt and deductions of annuities. However, structural features provide mitigation including fixed-price operation and maintenance contracts with Dilip Buildcon Limited for the entire concession period.
| Risk Mitigation: | Measures |
|---|---|
| O&M Contract: | Fixed-price with DBL |
| Contract Duration: | Entire concession period |
| MM Reserve: | One quarter expense equivalent |
| Interest Rate Risk: | Floating rate exposure |
| Regulatory Compliance: | SEBI InvIT guidelines adherence |
ICRA notes that any material delay or deduction in annuities, higher outflows on account of operations and maintenance activities could adversely impact cash flows and debt coverage indicators. The Trust remains exposed to risks associated with future asset acquisitions which could materially impact operational and financial risk profile.
Regulatory Compliance and Outlook
The rating finalization was communicated to stock exchanges under Regulation 23 of SEBI (Infrastructure Investment Trusts) Regulations, 2014. The Stable outlook reflects ICRA's expectations that the Trust will continue benefiting from regular annuity receipts without material delays or deductions, maintaining robust debt coverage metrics and moderate leverage profile.
With dual AAA ratings from both India Ratings and ICRA, Anantam Highways Trust demonstrates strong creditworthiness and operational capabilities in the highway infrastructure sector, positioning it well for stable cash flow generation and potential value-accretive acquisitions.
Historical Stock Returns for Anantam Highways Trust
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.04% | -0.01% | +0.21% | -1.31% | -1.31% | -1.31% |
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