­­­­Strategic location of the project with favourable traffic volumes
The toll road stretch is a part of the NH-44 corridor that starts from Mukarba Chowk in Delhi state (15.500 Km) and ends at Panipat in Haryana State (86.00 Km). NH 44 is aligned in North - South direction and traverse through entire country, connecting some of the most important cities of Haryana, Punjab, Chandigarh, Himachal Pradesh, Jammu and Kashmir, Ladakh amongst others in North India and with parts of Delhi, Uttar Pradesh, Rajasthan, Madhya Pradesh amongst others and Kanyakumari, Coimbatore, Bangalore and Hyderabad in South India. Major Industrial estates fall along the project road such as Kundli, Rai, Sonipat, Murthal, Barhi, Samalkha and Panipat. This is an existing 6-lane road where traffic is already plying, and the NHAI has been collecting the toll through Bhagan Toll plaza is in Sonipat district of Haryana. This is the only toll plaza on the project road which is located at km 53.600 near Bhagan village in Sonipat District. The average annual daily traffic (AADT) for the aforementioned stretch is ~1 lakh passenger car units (PCUs) as of FY23 which constitutes roughly cars/LMV and remaining being others.

Acuité believes that WIFPL will continue to receive benefit from strategic location of the road surrounding major industrial estates over the medium term.


Completion of 8 – lane main carriage way and achievement of PCOD II with healthy toll collections
The project was awarded to WIFPL by NHAI on June 8, 2020 under a Substitution Agreement from Mukarba Chowk - Panipat Toll Roads Limited (MCPTRL), an SPV of Essel Infraprojects Limited (EIL) after failing in completing the project due to inadequate financial and technical support from the sponsor. After facing several hindrances such as encroachment demolitions, HT Line shifting and specially a force majeure event of famer’s agitation which led to delay in completing the project, WIFPL received PCOD I on March 31, 2022 and started collecting tolls from April 06, 2022 with sharing ~16.5% of the toll revenues with NHAI. The project already had an existing 6-lane road where traffic was already plying and NHAI was collecting tolls.

Post PCOD for 53.763 KM in the month of March 2022, the project has also achieved the fresh PCOD-II for completion of 66.910 KM w.e.f. 28 March 2023. The final pending structure of the at project length @84 km was completed on June 20, 2023 and with the same the 8 – lane main carriage way of the project was completed and accordingly the NHAI’s share of toll revenue has also been proportionately reduced to only ~4.5% in FY24YTD (April and May 23) from earlier sharing ratio of ~16.5% in FY23. In this regard, NHAI has also approved the revised Toll Rates from April 2023 which includes normal WPI hikes and accordingly the toll rates have been also increased from April 2023. Accordingly, as the overall toll rates have also increased the net recovery to concessionaire has also increased with reduction in the NHAI’s share of toll revenue. The toll revenue details for the month of from May 2023 onwards showcased that the avg. daily toll revenue is now improved to ~ Rs. 95 lakh vis a vis avg. daily revenue of ~ Rs. 86 Lakhs in FY 2023. Furthermore, with the completion of the main carriage way, the company is now eligible to receive the entire amount of toll revenues without sharing it with NHAI.

Acuité believes the toll revenues of the company will continue to remain healthy over the medium term on account of completion of main carriageway and revision of toll rates by NHAI.

Explicit waterfall mechanism through TRA/Escrow account with creation of DSRA & Major maintenance reserve (MMR)

As per the new sanction terms, the company have to create Debt service Reserve account (DSRA) equivalent to 6 months of Interest and 2 quarter principal payments. If in anytime, amount in DSRA is utilized to make payment towards debt obligations, the same is to be immediately replenished by WIFPL from surplus cash flows. The company has already created DSRA of ~80 Cr. as on 28 June, 2023. WIFPL shall maintain Trust and retention account (TRA)/ESCROW account for cash flow management. The TRA shall be defined by presence of waterfall mechanism for prioritizing withdrawals during the construction and operational period. Apart from the first charges on movable and intangible assets, escrow, DSRA, MMR, term loans are also secured by way of pledging of 51 percent of the borrower’s share (2% held by WEL and 49% held by Actis) and creation of security by way of Indenture of mortgage (IOM) for perfection of security. Furthermore, as per the new sanction terms of the refinancing debt, an intercompany agreement is in place with all the SPVs taken over by Actis which states that in case of any shortfall or delay in servicing of debt obligations, O&M expenses including asset management expenses in any of the SPV for any reason, other SPVs shall provide required amount in the form of Inter Corporate Loan or issues ICDs from their surplus cashflows to the SPV where delay or shortfall has occurred so as to regularize the account of that particular SPV. Also, structured funding mechanism is present in the agreement which ensures adequate funding in the project SPVs well before the payment due dates.

Acuité believes that presence of such well-defined waterfall mechanism through Escrow/TRA to ensure prioritizing of withdrawals and prompt debt repayments.