BOT Road Sector - Eight Lane Project - KMs 65 Construction Period

0 1
1-Jan-19 31-Dec-19
Assumptions

Concession Period : 20 years (including Construction Period)

Capital Expenditure
Construction Period (years) 2
Engineering, Procurement & Construction Cost (EPC) - Rs 5
Crore /KM 325
Interest on Loans During Construction Period and
Preliminiary & Pre-operative expenses 75
Total Project Cost 400
Project Cost - Cash Outflows 25% 40%
Project Funding 100 160
Financial Structure
Debt / (Debt + Equity) 70.00%
Equity / (Debt + Equity) 30.00%
Coupon (rd) 9.50%

Cost of debt to company (Kd = rd*(1-Tc)) 6.56%

Moratorium Period - Principal Amount ( Years) 2

Repayment Period (10 years - Principal Payment in equal
installments)
Collateral: Step-in rights in case of default
Risk free rate of return (rf) 4.00%
Asset Beta (Assumed for similar companies) 0.60
Equity Beta for Project 2.00
Market Risk Premium (rm-rf) 5.76%
Weighted Average Cost of Capital (WACC) 9.24%

Cost of Equity (Ke) 15.51%

Debt Amount Withdrawn 70 112
Debt Repayments
Cumulative Debt Outstanding 70 182
Equity Funding 30 48
Traffic Forecasts
Monday and Friday (Number of vehicles per day) 11000
Passenger Cars 60%
Trucks / Busses 15%
Multi-axle Trucks 25%
Week-days (number of Vehicles per day) 9500
Passenger Cars 30%
Trucks / Busses 15%
Multi-axle Trucks 55%

Annual Growth rate in Traffic (1st year onwards) 8%

Toll Revenue Forecasts
Passenger Car Unit (Rs) 120
Truck / Buses (Rs) 180
Multi-axle Trucks (Rs) 250

Annual Growth rate in Toll Rvenue (4th year onwards) 2%

Operation & Maintenance exenses as a % of Toll Revenues 55%

Corporate Income Tax Rate (Tc) 31%

Free Cash Flows to Firms (FCFF)

Revenues (Crores)
Monday & Friday traffic forecast p.a.
Week-days traffic forecast p.a.
Weighted Average price per vehicle (Monday & Friday)
Weighted Average price per vehicle (Week-days)
Toll Revenues (crores)
Less: O & M Expenses@55%
EBIT
Less: Income tax@31%
Net Operating Profit after Tax (NOPAT)
Capital Expenditure -100 -160
Free Cash Flows to Firms (FCFF) -100 -160
Discounted Capital Expenditure with Risk free rate -100.00 -153.85
Net Present Value (WACC=9.24%) ₹ 32.02
IRR 10.12%
Cumulative FCFF -100 -260
Payback period (in years) 9.56
Assumption-1 (using WACC as a discount rate for all
CFs)
Discounted FCFF -100.00 -146.46
Cumulative discounted FCFF -100.00 -246.46
Discounted Payback period (in years) 16.64

Assumption-2 (using WACC as a discount rate for CFs in

operating period and risk free rate for CFs in
construction period)
Discounted FCFF -100.00 -153.85
Cumulative discounted FCFF -100.00 -253.85
Discounted Payback period (in years) 18.46

Net Present Value ₹ 12.52

IRR 10.54%
ruction Period Operatin
2 3 4 5 6 7 8 9
31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24 31-Dec-25 31-Dec-26 31-Dec-27

35%
140

98
-28 -28 -28 -28 -28 -28 -28
280 252 224 196 168 140 112 84
42
 1441111 1556399 1680911 1815384 1960615 2117464 2286861
3123456 3373332 3643199 3934655 4249427 4589381 4956532
161.5 164.7 168.0 171.4 174.8 178.3 181.9
200.5 204.5 208.6 212.8 217.0 221.4 225.8
85.90 94.63 104.24 114.83 126.50 139.35 153.51
47.24 52.04 57.33 63.16 69.57 76.64 84.43
38.65 42.58 46.91 51.67 56.92 62.71 69.08
11.98 13.20 14.54 16.02 17.65 19.44 21.41
26.67 29.38 32.37 35.66 39.28 43.27 47.66
-140
-140 26.67 29.38 32.37 35.66 39.28 43.27 47.66
-129.44 26.67 29.38 32.37 35.66 39.28 43.27 47.66

-400 -373.33 -343.95 -311.58 -275.92 -236.65 -193.38 -145.71

1 1 1 1 1 1 1

-117.31 20.46 20.63 20.80 20.98 21.16 21.33 21.51

-363.78 -343.32 -322.69 -301.88 -280.90 -259.75 -238.41 -216.90
1 1 1 1 1 1 1

-129.44 20.46 20.63 20.80 20.98 21.16 21.33 21.51

-383.28 -362.82 -342.19 -321.39 -300.41 -279.25 -257.92 -236.41
1 1 1 1 1 1 1
 Operating Period
10 11 12 13 14 15 16 17 18
31-Dec-28 31-Dec-29 31-Dec-30 31-Dec-31 31-Dec-32 31-Dec-33 31-Dec-34 31-Dec-35 31-Dec-36

-28 -28 -28

56 28 0
2469810 2667395 2880787 3111250 3360150 3628961 3919278 4232821 4571446
5353055 5781299 6243803 6743307 7282772 7865393 8494625 9174195 9908130
185.5 189.2 193.0 196.9 200.8 204.8 208.9 213.1 217.4
230.3 234.9 239.6 244.4 249.3 254.3 259.4 264.6 269.8
169.11 186.29 205.21 226.06 249.03 274.33 302.20 332.91 366.73
93.01 102.46 112.87 124.33 136.97 150.88 166.21 183.10 201.70
76.10 83.83 92.35 101.73 112.06 123.45 135.99 149.81 165.03
23.59 25.99 28.63 31.54 34.74 38.27 42.16 46.44 51.16
52.51 57.84 63.72 70.19 77.32 85.18 93.83 103.37 113.87

52.51 57.84 63.72 70.19 77.32 85.18 93.83 103.37 113.87

52.51 57.84 63.72 70.19 77.32 85.18 93.83 103.37 113.87

-93.21 -35.37 28.35 98.55 175.87 261.05 354.88 458.25 572.12

1 1

21.69 21.88 22.06 22.25 22.43 22.62 22.81 23.00 23.20

-195.21 -173.33 -151.27 -129.02 -106.59 -83.97 -61.16 -38.15 -14.96
1 1 1 1 1 1 1 1 1

21.69 21.88 22.06 22.25 22.43 22.62 22.81 23.00 23.20

-214.71 -192.84 -170.78 -148.53 -126.10 -103.47 -80.66 -57.66 -34.46
1 1 1 1 1 1 1 1 1
 19 20
31-Dec-37 31-Dec-38
 4937162 5332135
10700781 11556843
221.7 226.1
275.2 280.7
403.99 445.04
222.20 244.77
181.80 200.27
56.36 62.08
125.44 138.18

125.44 138.18
125.44 138.18

697.56 835.75

23.39 23.59
8.43 32.02

23.39 23.59
-11.07 12.52
1