(March 17): The road development arm of the Indian state of Maharashtra is planning to raise as much as 150 billion rupees (RM7.68 billion) through local-currency bonds, returning to the market after a 15-year hiatus.

Maharashtra State Road Development Corp is planning to issue the long-term bonds which carry tenors of at least 15 years, according to people familiar with the matter. The agency operates and constructs road projects in Maharashtra, India’s largest state economy and home to its financial hub. Proceeds will support various projects ranging from land acquisitions to construction, the people said.

The sale could happen in batches, though terms are not yet finalised, the people said. If packaged as a single deal, it would be the largest rupee bond since November 2023, according to data compiled by Bloomberg.

The borrowing is part of a push by the Indian government to overhaul road quality and reduce traffic. The agency separately received 215 billion rupees of funding commitments for a ring road project encircling Mumbai, Bloomberg News reported earlier, and Prime Minister Narendra Modi has emphasised infrastructure as a tool to spur economic growth.

It also marks a shift for MSRDC, which hasn’t sold a rupee bond in 15 years. Historically, the agency received most of its credit from state-owned lenders. But Indian authorities have been trying to encourage borrowers like MSRDC to sell longer-term corporate bonds as a way to develop the market and shift some of the debt burden as infrastructure spending and capital expenditure surge.

MSRDC has already held discussions with select long-term investors and rating companies, the people said. The sale is planned for the next financial year, which begins April 1, and the agency is in talks with the Maharashtra state government to consider a guarantee on the bonds, they added. MSRDC didn’t reply to an email seeking comment.

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