P U B L I C I S S U E O F TA X F R E E S E C U R E D R E D E E M A B L E N O N C O N V E R T I B L E B O N D S of face value of ` 1000 each in the nature of Debentures having tax benefits under section 10(15) (iv) (h)

of the Income Tax Act, 1961, as amended not exceeding ` 10,000 Crore NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI) (An Autonomous Body under the Ministry of Road Transport & Highways, Government of I ndia )
ABOUT THE ISSUER Autonomous authority of the GoI under the Ministry of Road Transport and Highways Constituted in 1989 by an Act of Parliament titled - The National Highways Authority of India Act, 1988 Operationalised in 1995 with the appointment of full time Chairman and other Members Nodal agency for development of National Highway Projects under NHDP and allied programmes approved by the Government of India survey, develop, maintain and manage the National Highways construct offices or workshops, establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it regulate and control the plying of vehicles develop and provide consultancy and construction services and collect fees for services or benefits rendered Government support in form of capital base, cess funds, additional budgetary support, capital grants, maintenance grant, ploughing back of toll revenue and loan from Government of India loan from multilateral agencies market borrowings Awarded 141 BOT Toll based contracts valued at Rs. 1,04,984 Crore and 49 BOT Annuity based contracts valued at Rs. 29,081 Crore through PPP mode (as on August 31, 2011) Shareholders fund of Rs. 55,607 Crore in FY11 against Rs. 44,860 Crore in FY10 Capital Base & Cess Fund at 57,758 Crore while Debt to Capital Ratio stood at 0.11x (as on June 30, 2011)

Functions

Sources of funds

Financials Performance

TAX BENEFITS OF THE BONDS The income by way of interest on these Bonds is fully exempt from Income Tax and shall not form part of Total Income No deduction of tax at source (TDS) from the interest, which accrues to the bondholders in these bonds irrespective of the amount of the interest or the status of the investors Wealth Tax is not levied on investment in Bond under section 2(ea) of the Wealth-tax Act, 1957 However, no deduction from the total income will be available for invested amount ISSUE OPENS ON:

December 28, 2011

ISSUE CLOSES ON:

January 11, 2012*

* The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and close at the close of banking hours, with an option for early closure (subject to the Issue being open for a minimum of 3 days) or extension by such period, upto a maximum period of 30 days from the date of opening of the Issue, as may be decided by the Board of NHAI subject to necessary approvals. In the event of such early closure of the subscription list of the Issue, NHAI shall ensure that public notice of such early closure is published on or before the day of such early date of closure through advertisement/s in a leading national daily newspaper.

G e n e r a l Te r m s o f t h e I s s u e
Issuer Issue Size Instrument Issuance Form Credit Rating National Highways Authority of India Rs. 5,000 crore with option to retain oversubscription upto overall shelf limit of Rs. 10,000 crore Tax Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures having tax benefits u/s 10 (15) (iv) (h) of IT Act, 1961 Both in dematerialized form as well as in physical form (at the option of investors) CRISIL AAA/Stable by CRISIL, CARE AAA by CARE and Fitch AAA(ind) with stable outlook by FITCH Pari passu charge on the immovable property of NHAI situated at Ahmedabad and exclusive first charge on fixed assets of NHAI (For further details, please refer to Prospectus Tranche I) BSE and NSE. The Designated Stock Exchange for the Issue is BSE The claims of the Bondholders shall be superior to the claims of any unsecured creditors, and shall rank pari passu to the claims of the secured creditors of NHAI SBICAP Trustee Company Limited NSDL and CDSL MCS Limited December 28, 2011 January 11, 2012 On Allotment Same as the Coupon Rate On Refunds 4%

Security Listing Nature of Indebtedness and Ranking Trustee Depositories Registrar to the Issue Issue Opening Date Issue Closing Date* Interest on Application Moneys

Specific Details on Individual Series

Series of Bonds Face Value per Bond Issue Price per Bond Minimum Application Size In Multiples of Market Lot/ Trading Lot Amount payable on application Trading Tenure Redemption Redemption Amount per Bond Coupon Rate Interest Payment Frequency Annualised Yield Deemed Date of Allotment One Bond Full amount on application Compulsorily in dematerialized form 10 Years At par at the end of 10th Year from the Deemed Date of Allotment Repayment of the Face Value of Bonds plus any interest that may have accrued at the Redemption Date 8.20% p.a. Annually Tranche-I [Series-I] Rs. 1,000 At par i.e. Rs. 1,000 Tranche-I [Series-II] Rs. 1,000 At par i.e. Rs. 1,000 50 Bonds i.e. Rs. 50,000 1 Bond i.e. Rs. 1,000 One Bond Full amount on application Compulsorily in dematerialized form 15 Years At par at the end of 15th Year from the Deemed Date of Allotment Repayment of the Face Value of Bonds plus any interest that may have accrued at the Redemption Date 8.30% p.a. Annually

8.20% 8.30% The Deemed Date of Allotment shall be the date as may be determined by the Board or Committee and notified to the BSE and NSE. All benefits under the Bonds including payment of interest will accrue to the Bondholders from the Deemed Date of Allotment. Actual Allotment may occur on a date other than the Deemed Date of Allotment.

Eligible Investor Categories and Allocation

Investor Categories Category I Public Financial Institutions Statutory Corporations Commercial, Co-operative and Regional Rural Banks Provident Funds, Pension Funds, Superannuation Funds and Gratuity Fund Insurance companies registered with the IRDA National Investment Fund Mutual Funds Foreign Institutional Investors (including sub-accounts) Companies, bodies corporate and societies registered under the applicable laws in India Public/private charitable/religious trusts Scientific and/or industrial research organizations Partnership firms in the name of the partners Limited liability partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009) Upto 40% of Overall Issue Size* Category II Category III

The following investors applying for an amount aggregating to above Rs. 5 lacs across all Series in the tranche issue: Resident Indian individuals Hindu Undivided Families through the Karta Non Resident Indians on repatriation as well as nonrepatriation basis.

The following investors applying for an amount aggregating to upto and including Rs. 5 lacs across all Series in the tranche issue: Resident Indian individuals Hindu Undivided Families through the Karta Non Resident Indians on repatriation as well as nonrepatriation basis.

Who can apply

Allocation / Prority

Upto 30% of Overall Upto 30% of Overall Issue Size* Issue Size# *on first come first serve basis to be determined on the basis of date of receipt of applications duly acknowledged by the Bankers to the Issue # on proportionate basis

(For further details, please refer to Shelf Prospectus and Prospectus Tranche I)