In the upcoming financial year 2024-25, the National Highways Authority of India (NHAI) will unlock a significant monetization potential. It will sell 33 road assets, poised to generate revenue ranging between Rs 53,000 to 60,000 crore.
This revelation stems from a recent ICRA report, released on Thursday. The report underscores NHAI’s strategic move towards monetization through toll-operate-transfer (ToT) and Infrastructure Investment Trust (InvIT) modes.
According to the ICRA report, NHAI’s planned monetization drive aligns with the broader objectives set forth under the National Monetisation Pipeline.
The Ministry of Road Transport and Highways (MoRTH) is anticipated to achieve up to 71 percent of its monetization target of Rs. 1.6 lakh crore by the end of FY2025, with NHAI playing a pivotal role in this endeavor.
In April 2024, NHAI unveiled an indicative list of 33 road assets slated for monetization in FY2025.
These assets, strategically located across 12 states, encompass nearly 2,750 km of highways and generate annual toll collections amounting to Rs. 4,931 crore.
Ashish Modani, Vice President at ICRA, highlighted NHAI’s track record in asset monetization over the past six years. During this period, NHAI monetized 29 assets across 10 ToT bundles, realizing Rs 42,334 crore.
Leveraging this experience, ICRA estimates that the identified 33 assets could fetch between Rs 53,000 to 60,000 crore. This estimation factors in a 20-year concession period and annual toll collections.
Furthermore, Modani underscored the financing opportunities this presents for banks and capital markets.
He estimated a lending opportunity in the range of Rs 38,000 to 43,000 crore based on the debt-to-equity funding ratio of past transactions.
NHAI’s approach involves grouping the 33 assets into large, medium, and smaller bundles, catering to different investor preferences.
During FY2022-FY2025, the National Monetisation Pipeline earmarked the road sector to contribute Rs 1.6 lakh crore, constituting 27 percent of the total monetization.
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