Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
Rating Rationale
Acuité has reaffirmed its long-term rating of ‘ACUITE A-’ (read as ACUITE A minus) to the Rs. 13,200 crore bank facilities of MSRDC Jalna Nanded Expressway Limited (MJNEL). The outlook is ‘Stable’.
Rationale for the rating
The rating reaffirmation reflects established track record of operations of MJNEL’s (borrower) parent, Maharashtra State Road Development Corporation (MSRDC - sponsor) in the infrastructural construction segment, strong resource mobilization ability on account of continued operational and financial support from MSRDC and Government of Maharashtra (GoM - Authority). Further, the rating factors in support for any shortfall in funding which the company will receive from GoM as per the signed Concession Agreement (CA). The rating also factors in receipt of quarterly annuity from the concessionaire after the achievement of COD, which will be used to service the debt obligations of the company. However, the rating is constrained by the nascent stage of the project with ~8.36% of the cost incurred as on March 31, 2026, pending equity infusion by the sponsor and the timely execution of engineering, procurement & construction (EPC) works. The rating also factors in any adverse changes in the fiscal indicators of GoM due to factors such as the prolonged slowdown in industrial activities or socio-economic challenges faced by Maharashtra.
About the Company
Incorporated in May 2022, MJNEL is a wholly owned subsidiary of MSRDC, formed for construction, operation and maintenance of a greenfield, six lane, access-controlled expressway having length of ~179.85 km connecting Hindu Hrudaysamrat Balasaheb Thackeray Maharashtra Samruddhi Mahamarg from Jalna to Nanded and other related structures in Nanded city having length of ~4.48 km, in accordance with the concession agreement between Sponsor, Authority and the Borrower. The current directors of the company are Mr. Anilkumar Baliram Gaikwad, Mr. Sahebrao Kundlikrao Survase and Mr. Rajesh Bhagwan Patil
Unsupported Rating
Not Applicable
Analytical Approach
Acuité has considered the standalone approach while assessing the business and financial risk profile of MJNEL and has factored in financial, operational and managerial support it receives from GoM through MSRDC by virtue of it being a step-down subsidiary of the GoM. The rating factors in the 100 percent shareholding of MSRDC in MJNEL along with the strategically important role played by the entity in implementing a key infrastructure project in the state.
Key Rating Drivers
Strengths
Extensive experience of the promoter in the infrastructure industry and support from GoM
MJNEL, which is the concessionaire, is a wholly owned subsidiary of MSRDC, which is in turn fully owned by the GoM. MSRDC, the sponsor of the project has been appointed as the implementation agency for the development of greenfield expressway project between Jalna and Nanded along a new alignment. MSRDC has an extensive experience in the infrastructure industry and has successfully completed several key projects such as Mumbai Pune Express Way (MPEW), Bandra Worli Sea Link (BWSL), etc. The GoM exercises significant control over the working of MSRDC through its board of directors. All the directors are nominated by the GoM from time to time. The key management personnel and the board of directors of MJNEL comprise members drawn from the senior management of MSRDC.
Acuite believes MJNEL’s linkages with the GoM through its sponsor MSRDC will provide adequate support to the credit profile of the company.
Receipt of annuity payments to support debt servicing
As per the CA, the tenure of the concession period is 24 years from the date of appointment of the concessionaire, which include 2.5 years of construction period for EPC contractor. The company will be receiving quarterly annuity payments from the GoM for a period of 21.5 years after the achievement of COD. The final project cost as approved by the authority is Rs.21,816.07 crores (higher compared to earlier estimated of Rs.17,798.72 crore) which will funded by the means of debt funding, which is already tied up, as well as equity infusion by the sponsor. The project is being built on Design, Built, Finance, Operate & Transfer (DBFOT) annuity mode. Hence, the debt availed by the company will be serviced from the receipt of quarterly annuity payments, which the company will be receiving after the achievement of COD.
Funding shortfall support agreement from GoM under the Concession Agreement
A tripartite CA is executed amongst the Borrower, as Concessionaire, MSRDC as Sponsor and GoM as Concessioning Authority. This agreement forms the basis of the support from GoM which will be available to MJNEL. As per articles of the CA, any cash shortfall during the operation period and/or the construction period or in case of cost overruns beyond the envisaged total project cost would be met by the Concessioning Authority.
Weaknesses
Nascent stage of project with significant implementation risk
The CA for MJNEL has been signed by the authority, and the project appointment date was set on August 18, 2025. MSRDC holds responsibility for ensuring timely land availability for construction activities. The project has been divided into six packages, awarded to multiple contractors. As of now, work orders have been issued to four contractors, while the remaining two will receive theirs once land clearance is completed. As of March 31, 2026, approximately 8.36% of the total project cost has been incurred through promoter contributions. Further, given its greenfield nature, the project faces inherent risks such as cost and time overruns. However, the division into six packages and allocation to multiple contractors helps mitigate the risk of failure by any single contractor.
Linkages to the fiscal position of Maharashtra
Maharashtra is India’s leading industrial state, its gross state domestic product (GSDP) is expected (at current prices) to be Rs. 54.09 Lakh Cr. for FY2026-27 as against Rs 51.01 Lakh Cr. for FY2025-26 (RE). The fiscal deficit of Maharashtra for FY2026-27 is targeted at 2.8 percent of GSDP against 3.0% percent in FY2025-26 (RE). Any adverse changes in the fiscal indicators of GoM due to factors such as the prolonged slowdown in industrial activities or socio-economic challenges faced by Maharashtra, may have a significant impact on MJNEL and will be a key monitoring factor.
Rating Sensitivities
Potential triggers (individual or collective) for an upward rating action:
Improvement in the credit rating profile of GoM
Timely project completion leading to flow of adequate annuities
Potential triggers (individual or collective) for a downward rating action:
Any change in support extended by MSRDC or GoM
Any escalation in project costs resulting in higher debt levels, thereby adversely affecting the financial risk profile.
Liquidity Position
Adequate
Acuité expects the cashflows from operations to remain negative for the first few years of operations for MJNEL. However, MJNEL will continue to get support from GoM under the CA during the construction as well as operational period. The debt repayment of the facility is expected to commence after 6 months from the achievement of COD as per the agreement. The liquidity of the company is likely to remain adequate over the medium term on account of continued support from GoM and MSRDC to fund the liquidity deficit in the initial stage of operations.
Outlook : Stable
Other Factors affecting Rating
None
Key Financials :
Not Applicable, considering the operations have not commenced yet
Status of non-cooperation with previous CRA (if applicable)
National Bank for Financing Infrastructure and Development
Not avl. / Not appl.
Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
31 Mar 2044
1885.00
Simple
ACUITE A- | Stable | Reaffirmed
UCO BANK
Not avl. / Not appl.
Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
31 Mar 2044
1225.00
Simple
ACUITE A- | Stable | Reaffirmed
Rural Electrification Corporation Ltd.
Not avl. / Not appl.
Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
31 Mar 2044
1500.00
Simple
ACUITE A- | Stable | Reaffirmed
India Infrastructure Finance Company Ltd.
Not avl. / Not appl.
Term Loan
Unlisted
RBI
Not avl. / Not appl.
Not avl. / Not appl.
31 Mar 2044
750.00
Simple
ACUITE A- | Stable | Reaffirmed
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
Sr. No.
Company Name
1
Government of Maharashtra
2
MSRDC Jalna Nanded Expressway Limited
Contacts
List of instruments and names of regulators of the instruments
