The National Highways Authority of India (NHAI) is set to monetise 33 road assets through the toll-operate-transfer (TOT) and Infrastructure Investment Trust (InvIT) mode in the financial year 2025, which could fetch between Rs. 53,000 and Rs. 60,000 crore, according to estimates by ICRA, a leading credit rating agency. This potential monetisation could also translate into a lending opportunity of Rs. 38,000-43,000 crore for banks and capital markets.
The 33 road assets, spread across 12 states and spanning nearly 2,750 km, have annual toll collections of Rs. 4,931 crore. The NHAI plans to club these assets into large (more than Rs. 6,000 crore), medium (about 3,000-4,000 crore), and smaller bundles (Rs. 1,000-3,000 crore) to cater to different types of investors.
Mr. Ashish Modani, Vice President and Co-Group Head, Corporate Ratings, ICRA, said, "Over the last six years, the NHAI has monetised 29 assets across 10 TOT bundles with valuation multiples ranging between 0.44 times to 0.93 times, realising Rs. 42,334 crore so far. Considering a 20-year concession period and annual toll collections, the identified 33 assets may garner between Rs. 53,000 – 60,000 crore, as per ICRA's assessment."
The composition of the bundles will play a crucial role in determining the valuation multiple. The presence of road stretches built under the annuity mode or Hybrid Annuity Mode (HAM) will reduce the requirement for operation and maintenance expenses for the new concessionaire, leading to a relatively higher multiple.
Under the National Monetisation Pipeline (NMP), road sector monetisation was expected to account for Rs 1.6 lakh crore, or 27% of the total monetisation during FY2022-FY2025. By the end of FY2024, the NHAI, together with the Ministry of Road Transport and Highways (MoRTH), had realised around Rs. 0.53 lakh crore (~33%) through TOT and InvIT modes. If the identified 33 assets generate the estimated Rs. 53,000 – 60,000 crore in FY2025, the achievement against the NMP target could reach between 65% and 71%.