ICRA Projects Significant Upsurge in Road Monetisation for FY26

According to ICRA, road monetisation in India could witness substantial growth, projecting proceeds between Rs. 35,000-40,000 crore in FY26, provided that the National Highways Authority of India (NHAI) effectively monetises its identified assets. This forecast is anchored on the median valuation multiple of 0.62 times observed across ten TOT (toll-operate-transfer) bundles awarded over the past three years. The expected increase marks a significant improvement from the Rs. 24,399 crore monetised in FY25, surpassing the budgeted target of Rs. 30,000 crore for the next fiscal year.

NHAI's robust pipeline for monetisation includes the completion of five TOT bundles, for which bids have already commenced, along with the transfer of project stretches to its Infrastructure Investment Trust (InvIT). Vinay Kumar G, ICRA's Sector Head for Corporate Ratings, highlighted that NHAI has employed two primary monetisation mechanisms—TOT and InvIT—since FY19, collectively raising Rs. 92,633 crore by FY25. From FY23, NHAI initiated publishing annual asset lists for monetisation, leading to the announcement of 7,000 km for monetisation between FY23 and FY25, with 3,750 km still to be monetised.

ICRA's analysis underscores a valuation multiple range from 0.46 to 0.93 times from the ten awarded TOT bundles over recent years, with an average concession of 20 years. Considering these multiples, existing assets, TOT bundles, and those identified for FY26 could yield Rs. 35,000-40,000 crore in monetisation, contributing to a cumulative total of approximately Rs. 1.3 lakh crore since inception. Despite NMP's Rs. 53,366 crore target for FY2025, the achievements fell short due to deferred awards of TOT bundles, affecting earlier estimates.

(With inputs from agencies.)