FDR margin frozen across packages
Every BG — bid, performance, mobilisation, retention — carries cash margin or an FDR lien. Across active packages that is crores parked in the bank instead of on site.
Stop locking crores of FDR margin across your packages.
Surety Bonds for EPC & Highway Contractors
Bid, performance, mobilisation and retention bonds stack across every active highway package — and each one blocks cash or an FDR lien. IRDAI-licensed Insurance Surety Bonds do the same job with little or no cash margin, accepted by NHAI as bid and performance security and for mobilisation advance under Policy Circular 3.1.41/2025. Free the margin and put it back into the next package. Part of Finnova’s ₹4,250 Cr+ mobilised across 100+ corporate-finance mandates since 2011.
IRDAI-regulated NHAI 3.1.41/2025 · EPC · HAM · BOT No FDR margin blocked
Finnova’s corporate-finance track record since 2011, in numbers
₹4,250 Cr+
Capital mobilised across sectors100+
Deals advised end to end₹10,369 Cr
ISBs on NHAI contracts to Jul 2025 (PIB)3.1.41/2025
Current NHAI circular accepting ISBsSince 2011
CA / ex-banker, senior on every fileAn Insurance Surety Bond is a three-party guarantee from an IRDAI-licensed insurer that you will honour an obligation — used across the highway bond lifecycle as bid, performance, mobilisation and retention security with little or no cash margin. By 12 insurers, ~₹10,369 Cr of ISBs have been issued on NHAI contracts till July 2025 (PIB, 11 Sep 2025). Track the NHAI / MoRTH circulars →
Finnova Advisory is an advisory firm — surety bonds are underwritten by IRDAI-licensed insurers; we structure and arrange, we do not underwrite.
The EPC capital squeeze
Four bonds per package — all blocking your margin
A highway contractor never carries one guarantee. Bid security, performance security, the mobilisation-advance guarantee and retention bonds stack across every live package — and the bank backs each with cash margin or an FDR lien. Run a portfolio of packages and crores sit frozen. Insurance Surety Bonds across the lifecycle release that capital. They link up to our full insurance surety bond practice.
Mobilisation advance is your heaviest BG
The mobilisation-advance guarantee on an EPC award is one of the largest obligations you carry — and the one that most blocks your bank’s appetite for the next package.
Bank limits cap how many bids you chase
Non-fund-based limits are finite. When BGs across your packages consume them, your bidding capacity is rationed by the bank — not by your ability to build.
What each obligation needs
BG today vs ISB — across the bond lifecycle
Walk the obligations a single highway package throws at you — bid, performance, mobilisation, retention — and see what each costs as a bank guarantee versus an Insurance Surety Bond. The pattern is the same every row: a BG blocks capital, an ISB keeps it deployable.
| Obligation | Bank Guarantee today | Insurance Surety Bond |
|---|---|---|
| ObligationBid security (EMD) | Bank GuaranteeCash / DD / FDR or BG locked through the tender period — across every package you chase | Surety BondInsurer-backed bid bond, little or no cash margin — accepted under GFR Rule 170(i) and NHAI bidding docsBid more packages |
| ObligationPerformance security | Bank GuaranteeBG of ~5–10% of contract value, cash margin + FDR lien blocked for the build | Surety BondPerformance bond with no FDR lien — secured by counter-indemnity, not blocked cashFrees crores |
| ObligationMobilisation advance | Bank GuaranteeBank guarantee for the full advance — one of the heaviest BGs you carry | Surety BondMobilisation bond accepted by NHAI for EPC under Circular 3.1.41/2025 (incl. existing contracts) |
| ObligationRetention money | Bank GuaranteeCash retained by the obligee, or an FDR-backed BG to release it early | Surety BondRetention money bond releases the cash without a fresh FDR lien |
| ObligationImpact on bank limits | Bank GuaranteeEach BG consumes non-fund-based limits across the portfolio | Surety BondDoes not touch banking limits — capacity for the next package stays freeLimits stay free |
Indicative — actual margin, premium and acceptance depend on the insurer, your profile and the bidding-document wording. We size each obligation precisely for your package. See the live BG-to-surety-bond switch in detail.
How Finnova helps
From bidding document to a whole-package bond programme
We read the bidding documents the way an underwriter and a banker both would — then build a programme across your packages, match each obligation to the right insurer, and free the margin you’ve been blocking.
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Map your live BG portfolio
2–3 daysWe list the bid, performance, mobilisation and retention obligations across your active and upcoming packages — and the cash margin and FDR liens each one blocks today.
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Match insurers to each obligation
2–4 daysWe match your profile and each NHAI / MoRTH obligee to IRDAI-licensed insurers whose appetite, turnaround and wording fit — insurer-agnostic, never a single panel.
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Underwriting & issuance
2–5 days eachWe compile financials and project data, address insurer queries and coordinate issuance in the obligee-acceptable format — ahead of each bid or award deadline.
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Free the margin, fund the next package
ongoingAs bonds replace BGs across the portfolio, the released FDR margin and bank limits go back to work — often syndicated into the next mobilisation.
Who it’s for & what a strong case needs
Built for contractors running multiple packages
If you execute NHAI, MoRTH, HAM or BOT work across several packages, surety bonds stop your cash being rationed across guarantees — and we know what makes a clean underwriting case for a highway file.
Where we work
CA-led and Pune & Mumbai-based, serving Maharashtra and pan-India.
What makes a strong case — indicative documentation
- Audited financials — typically last 3 years
- The bidding document / LOA and the security clauses
- Work-on-hand and order book across packages
- Highway / EPC execution track record
- External credit rating (preferred; sharpens premium)
- KYC of the entity, promoters and signatories
Indicative — varies by insurer, package and risk profile. See the full documents checklist or how to get a surety bond.
Consultation
Running highway packages? Let’s free the margin
One conversation tells you how much FDR margin your bond portfolio is blocking, which insurers will write across the lifecycle and how fast bonds can issue before each deadline. No pitch — a straight read from people who arrange surety bonds every week.
Thank you — your enquiry has been submitted
We’ve received your details. A senior member of our team will review them and get back to you within one business day. Everything you’ve shared stays strictly confidential.
FAQ
EPC & highway surety bonds, answered
Yes. NHAI permits Insurance Surety Bonds as bid security and performance security across EPC, HAM and BOT (Toll) bidding documents — and for mobilisation advance in EPC contracts. This began with NHAI Policy Circular No. 18.88/2023 dated 13 June 2023, since re-issued and widened by NHAI Policy Circular No. 3.1.41/2025 dated 2 January 2025, which extends the mobilisation-advance permission to existing contracts too. Always confirm the specific bidding-document wording.
On a single EPC package a contractor usually carries bid security, performance security (often ~5–10% of contract value), a mobilisation-advance bank guarantee and retention bonds at once — each backed by cash margin or an FDR lien. Surety bonds carry little or no cash margin, secured instead by a counter-indemnity, so that locked capital stays deployable. Across a live portfolio of packages the freed margin often funds the next mobilisation.
Yes — this is one of the heaviest guarantee obligations a highway contractor carries, and NHAI specifically permits an Insurance Surety Bond against the mobilisation advance in EPC contracts under Circular 3.1.41/2025. Confirm the operative format in the bidding-document annexures for your package.
No. A bank guarantee ties up your non-fund-based limits and blocks cash or FDR margin. An Insurance Surety Bond is an insurer-backed guarantee that does not touch your banking limits, so the limits stay free for the working capital your sites actually need. It is commercially substitutable for a BG, but legally a distinct contract of insurance.
Premium is credit-underwritten on your financials, execution track record, work-on-hand, bond type and tenor — indicatively around 0.5–3% per annum, with little or no cash margin. It is not a flat rate; Finnova obtains firm quotes from shortlisted IRDAI-licensed insurers for each package.