The Yamuna Expressway Industrial Development Authority (YEIDA) is gearing up to secure Rs 10,000 crore through the issuance of infrastructure and municipal bonds to fund its ambitious projects, including the development of a rapid rail corridor. This initiative was announced during a recent meeting where officials discussed the crucial step of assessing YEIDA’s creditworthiness before proceeding with the bond issuance.
In the meeting held on Tuesday, two reputed companies, CRISIL and CARE, expressed interest in conducting the credit rating for YEIDA. The selected rating agency will evaluate the Authority’s financial management, strengths, weaknesses, and borrowing capacity for term loans as reported in TOI.
YEIDA CEO Arun Vir Singh highlighted the significance of the funds for various key projects. These projects include not only the rapid rail corridor but also industrial and information technology parks, sports facilities, major roads, bridges, and the international airport. Singh emphasized that issuing infrastructure and municipal bonds is crucial for achieving rapid and comprehensive development in the region.
A substantial portion of the raised funds will be allocated to land acquisition and infrastructure development for industrial parks. Additionally, meeting the financial requirements for the rapid rail connectivity between Noida International Airport in Jewar and Delhi is identified as a significant challenge for the Authority.
Infrastructure bonds are debt instruments used to fund city development or maintenance projects. Investors receive a fixed amount of principal along with interest over a specified period. YEIDA, in its pursuit of funding, recently secured a loan from SBI, resulting in a favorable A+ rating from the financial institution. The credit rating agencies typically use a scale from ‘AAA’ to ‘D’, with ‘AAA’ representing the highest rating and ‘D’ the lowest or bad credit rating.
YEIDA is optimistic about an improved rating, considering its receipt of an interest-free loan of Rs 1,779 crore from the state government for acquiring over 1,200 hectares of land for industrial parks. Furthermore, the Authority’s profits have shown consistent growth, surpassing Rs 500 crore in the current financial year.
The Authority has issued a request for proposal to hire a rating agency, with a submission deadline of December 5 and the opening of technical bids scheduled for December 7. The credit rating process will unfold in three stages, involving data gathering, presentation of feedback and suggestions, and the submission of the final credit rating report, with the entire process possibly extending beyond seven months.