| Strong parentage and established track record of sponsor
The project is sponsored by WEL, part of the Welspun Group, which has an extensive experience in the infrastructure segment including roads, water and urban infrastructure projects along with exposure to oil and gas sectors. The net-worth of the sponsor stood at Rs. 2689.75 Cr. as on March 31, 2025. The extent of WEL’s management involvement is evident from WSNRPL’s common branding, shared management structure, and centralized decision-making exercised at the WEL level. As of March 13, 2026, the project has incurred cost of Rs. 2182.48 Cr. out of total cost of Rs. 2563.70 Cr. wherein the sponsor has almost fully infused their contributions amounting to Rs. 308.15 Cr.
Further, WEL has extended an unconditional and irrevocable corporate guarantee and shortfall undertaking for the rated debt, covering any termination payment shortfall. The guarantee will remain valid until the receipt of the first annuity payment or the creation of all stipulated reserves, whichever is later, as per the sanction letter.
Strong counterparty and benefits derived under HAM leading to low revenue risk
The project has been issued and awarded by the National Highways Authority of India (NHAI), a central government agency that holds strategic importance for the Government of India. It is being developed under an annuity-based revenue model, wherein WSNRPL bears no traffic risk and recovers the entire capital cost through biannual annuity payments over a 15-year concession period. Under this model, WSNRPL will receive 40 percent of the project cost as construction grants, while the remaining 60 percent will be paid in 30 semi-annual annuity instalments, likely commencing in September/October 2026, and adjusted for the Price Index Multiple. In addition to annuity payments, NHAI will reimburse interest on the reducing balance of the completion cost (net of grants) at a rate equivalent to the bank rate plus 3.00 percent spread. NHAI will also reimburse the operations and maintenance (O&M) cost of Rs. 136.19 Cr., adjusted for the price index. WSNRPL will be responsible for operations and maintenance during the concession phase, with financial support from NHAI. The company has already received four (out of five) milestone payments, the latest being received in Dec 2025. The annuity model includes price index adjustments to mitigate inflation-related risks and partially offset price fluctuation risks.
Explicit waterfall mechanism through escrow account with creation of DSRA & major maintenance reserve (MMR)
WSNRPL shall maintain a Trust and Retention Account (TRA)/escrow account for effective cash flow management. All receipts from NHAI shall be routed through this escrow account, which shall operate under a well-defined cash flow structure. The account shall incorporate a waterfall mechanism to prioritize withdrawals during both the construction and operational phases. Additionally, as per the consortium sanction terms, DSRA equivalent to 2 quarters of debt service obligation (Principal + Interest) should be maintained. The first part of DSRA, covering one quarter of obligations to be created immediately on receipt of 1st annuity and the second part, covering one quarter of obligations immediately after 2nd annuity. If in anytime, amount in DSRA is utilized to make payment towards debt obligations, the same is to be immediately replenished by WSNRPL from surplus cash flows to the extent of amount so utilized upon receipt of the NHAI annuity from the date of utilization.
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| Delay in project completion
WSNRPL received its appointment date on October 05, 2020, and since then the project has faced multiple challenges such as delays in land availability (ROW), environmental clearance issue, weather and soil conditions, amongst others leading to continuous extension in the project completion timelines and revision in the bid project cost. Earlier, the scheduled project completion date was expected to be October 31, 2025, however, as per Settlement Agreement 3 (entered on Jan 02, 2026) it has been further extended till May 31, 2026 (90 days grace up to August 31, 2026) by the authority. Further, the project has completed main carriage way for almost 45 km of length (out of 55 km total length) and anticipates completing the full length by May 31, 2026. Therefore, timely completion of the project without any cost overruns remains a key rating sensitivity.
Exposed to risks such as delay in receiving annuity payments and any changes in operational cost & interest rate
As per the concession agreement, the company is entitled to receive a semi-annual annuity over the concession period. However, any delay in the timely receipt of these annuity payments could adversely affect its debt servicing capacity. In addition to fixed annuities, the project is also eligible to receive interest on outstanding annuity amounts, calculated at the prevailing bank rate plus an applicable spread. The company is also exposed to risks associated with the maintenance of the project and failure to adhere to prescribed maintenance standards or delays in timely upkeep could lead to deductions in annuity payments, thereby significantly impacting the company’s cash flows.
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