Rationale

 For the [ICRA]BBB-(CE)(Stable) rating

 The reaffirmation of the rating reflects the adequate budgetary allocation for debt servicing of Punjab Infrastructure Development Board’s (PIDB) bonds by the Government of Punjab (GoP). The latter has extended an unconditional and irrevocable guarantee for repayment of the principal and payment of interest over the tenure of the rated instruments. Therefore, the rating assigned to PIDB’s bond programmes primarily reflects the credit profile of the GoP. The rating assigned to the bond programmes of PIDB factors in the integrity and the expected adherence to the structured payment mechanism by PIDB. The rating continues to derive comfort from the adequate budgetary allocation for debt servicing of ICRA-rated bonds by the GoP in FY2025 and the expected timely release of the same in the ongoing fiscal, in line with the practice followed during FY2019-FY2024. However, the rating is constrained by PIDB’s dependence on the state government, which has a moderate credit profile for timely debt servicing of bonds. ICRA notes that w.e.f. April 5, 2021, the board has started receiving a special infrastructure development (ID) fee on petrol, diesel and immovable property transactions within the state. While this special levy has improved PIDB’s revenue and liquidity profile from FY2022, ICRA believes that support from the state government in the form of budgetary provision for its debt servicing requirements would remain critical.