ICRA predicts that NHAI will earn around Rs 60,000 crore in 2024-25 through the monetization of its road projects.

The National Highways Authority of India (NHAI) recently announced that it has potential to earn a whopping Rs 53,000 to 60,000 crore from the sale of 33 road assets in the next financial year, 2024-25. This announcement was made in a report released by ICRA on Thursday.

According to ICRA, the Ministry of Road Transport and Highways could potentially achieve up to 71% of its target of Rs 1.6 lakh crore through the National Monetisation Pipeline by the end of FY2025. In April 2024, NHAI released a list of 33 road assets that it plans to monetise through a combination of toll-operate-transfer and Infrastructure Investment Trust in FY2025.

These assets are spread across 12 states, covering a total distance of nearly 2,750 km and generating an annual toll collection of Rs 4,931 crore. Ashish Modani, the Vice President of ICRA, stated that in the past six years, NHAI has successfully monetised 29 assets through 10 TOT bundles, earning a total of Rs 42,334 crore. Based on the 20-year concession period and annual toll collections of the identified 33 assets, ICRA estimates a potential earning of Rs 53,000 to 60,000 crore. This could also result in a lending opportunity of Rs 38,000-43,000 crore for banks and capital markets, based on past funding patterns.

The NHAI plans to group the 33 assets into large, medium, and smaller bundles to attract different types of investors. Modani mentioned that the composition of these bundles will play a crucial role in determining the valuation multiple, with road stretches built under the annuity or Hybrid Annuity Mode expected to have a higher multiple due to reduced operational and maintenance expenses.

Under the National Monetisation Pipeline, the road sector is expected to contribute Rs 1.6 lakh crore, which is 27% of the total monetisation target for FY2022-FY2025. As of now, NHAI has already earned Rs 0.53 lakh crore through the two modes for monetising its assets.

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