Centre Could Raise ₹35,000-40,000 Crore By Moentizing Road Assets In FY26: Icra

(MENAFN- Live Mint) The government could raise ₹35,000-40,000 crore in 2025-26 by timely monetization of road assets identified by the National Highways Authority of India (NHAI), according to ratings agency Icra.

This is higher than the budgeted monetization target of ₹30,000 crore for the current fiscal and a healthy improvement from the ₹24,399 crore monetized in 2024-25.

Icra projections are based on the median valuation multiple of 0.62X seen across the 10 awarded TOT (toll-operate-transfer) bundles by the NHAI over the last three years.

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The NHAI has identified a robust pipeline of projects earmarked for monetization, which includes the estimated completion of five TOT bundles with bids already initiated. Moreover, it has earmarked the transfer of project stretches to the infrastructure investment trust (InvIT) established by the NHAI.

“The NHAI has predominantly utilized two asset monetization mechanisms, namely TOT and InvIT, since 2018-19. The authority has successfully raised ₹92,633 crore through these channels up to 2024-25. The TOT method generated 53% of the NHAI's total monetization during FY19-FY25. InvIT, introduced in FY22, has seen its share expand over the past two years,” said Vinay Kumar G., sector head, corporate ratings, Icra.

“Since FY23, the NHAI has begun publishing annual lists of assets designated for monetization . Between FY23 and FY25, approximately 7,000km were announced for monetization, of which about 2,000km have been completed to date, and an additional 1,170km have been offered for sale through five TOT bundles. Moreover, the NHAI is yet to monetize nearly 3,750km that were made available for sale during this period,” he added.

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Icra's analysis suggests the valuation multiple has varied between 0.46X and 0.93X across the 10 awarded TOT bundles over the last three years, with the median multiple being 0.62X. The average concession period has been 20 years, and the toll-collection track record for the underlying assets has varied within 4-15 years (median of 10 years).

Based on this multiple, monetization of existing identified assets, along with TOT bundles and assets identified in 2025-26, could potentially garner monetization proceeds of ₹35,000-40,000 crore, taking its total monetization since inception to around ₹1.3 trillion.

“The National Monetization Pipeline set a target of approximately ₹53,366 crore with a total monetizable length of 8,894km for 2024-25, whereas the 2024-25 budget projected a lower figure of ₹30,000 crore. Of this amount, the NHAI generated ₹6,661 crore through the monetization of the TOT bundle 16 (252km), and ₹17,738 crore via the fourth round of asset transfer to the NHAI InvIT (821km), amounting to ₹24,399 crore in proceeds and a cumulative length of 1,073km during 2024-25," Kumar said.

"The deferment of awards under TOT bundles 15, 17, 18, and 19 resulted in slippages against Icra's prior estimate of ₹37,000-40,000 crore for 2024-25,” he added.

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