Rating agency Icra on Monday said more than 70 percent of the total Ujwal Discom Assurance Yojna (UDAY) bonds with outstanding of Rs 2,039.1 billion at the end of March 2018 will mature during 2019-20 to 2026-27, with peak redemption in FY2027.
The rating agency in research report titled 'Update on State Government Finances' further said fifteen states issued Rs 2,107.6 billion of UDAY bonds in 2015-16 and/or 2016-17, the redemption of which started in 2017-18 and will extend up to 2031-32.
"More than three-fourths of these bonds were issued by five states, namely Rajasthan, Uttar Pradesh (UP), Haryana, Tamil Nadu (TN) and Punjab," Icra said.
According to the rating agency, the aggregate repayment of the UDAY bonds of the 15 states will exacerbate the redemption pressure and the gross rollover requirements during 2019-20 to 2026-27, assuming that the states would resort to market borrowings to repay the UDAY bonds.
"This may necessitate a larger gross annual borrowing limit to be permitted to these 15 states by the Government of India (GoI)," it noted.
On November 5, 2015, the government of India had approved the UDAY scheme with an objective of financial turnaround of the state power distribution corporations (Discoms).
First Published: Nov 20, 2018 5:39 AM IST
