Advik Capital in advanced stage of financing NHAI backed Gohana Sonepat highway project

Advik Capital Limited has announced that it is in the early stage of financing the National Highway Authority of India (NHAI) backed Gohana Sonepat highway project. The company in an exchange filing said that the development will help expand its long-term asset book. Advil Capital is a non-banking finance company (NBFC) based in New Delhi.

Earlier, the company had successfully disbursed a long-term loan amounting Rs 500 million for Jind Gohana highway. The project is backed by the NHAI under the government's Hybrid Annuity Model (HAM) wherein Punjab National Bank is the consortium lead bank and PNB Investment Services is security trustee. PNB Investment Services is a wholly owned subsidiary company of PNB.

"By funding mega infra projects, the company not only enter in to arena of bigger business opportunities going forward, diversify its business, mitigate concentration risk but also ensure long-term viable revenue visibility," the filing said.

Click Here For Latest Updates On Stock Market | Zee Business Live

To achieve India’s ambitious goal to be a $5 trillion economy by 2025, the government is increasingly looking to the private sector for forging partnerships via effective models for coworking between public and private sectors for indispensable strong infrastructure growth.

The HAM is a hybrid/mix of the EPC (engineering, procurement and construction) and BOT (build, operate, transfer) models. It was introduced by the government to facilitate investments in road infrastructure projects. As many as 30 highway projects have been awarded under HAM by the NHAI at a total cost of about Rs 28,000 crore.

In pure EPC model, NHAI pays private players to lay roads. The private player has no role in the road's ownership, toll collection or maintenance as it is taken care of by the government itself. Under the BOT model, private players play an active role as they build, operate and maintain the road for a specified number of years.

To optimise the benefits of both these models, the government introduced HAM. HAM combines EPC (40 per cent) and BOT Annuity (60 per cent). On behalf of the government, NHAI releases 40 per cent of the total project cost. It is given in five tranches linked to milestones. The balance 60 per cent is arranged by the developer.

Click Here For Latest Updates On Stock Market | Zee Business Live