NHAI has a monetisation potential of Rs 53,000 to 60,000 crore from the sale of 33 road assets through the toll-operate-transfer and Infrastructure Investment Trust mode that it has lined up for the financial year 2024-25, according to an ICRA report released on Thursday.

ICRA also expects that the Ministry of Road Transport and Highways (MoRTH) could achieve up to 71per cent of its monetisation target of Rs. 1.6 lakh crore under the National Monetisation Pipeline by the end of FY2025.

In April 2024, the National Highways Authority of India (NHAI) released an indicative list of 33 road assets that it plans to monetise in FY2025 through a mix of toll-operate-transfer (ToT) and Infrastructure Investment Trust.

These assets are spread across 12 states, cumulatively spanning nearly 2,750 km and with annual toll collections of Rs. 4,931 crore.

ICRA Vice President Ashish Modani said: “Over the last six years, 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. Going by the debt-to-equity funding ratio seen in the past transactions, this could translate into a Rs 38,000-43,000 crore lending opportunity for banks/ capital markets.”

The NHAI intends to club the 33 identified 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), for different types of investors.

“The composition of the bundles will remain a determining factor for the valuation multiple as the presence of road stretches built under the annuity mode/Hybrid Annuity Mode (HAM4), will reduce the requirement for operation and maintenance expenses (for the new concessionaire) and hence, will carry a relatively higher multiple,” Modani added.

Under the National Monetisation Pipeline, the road sector monetisation was expected to account for Rs 1.6 lakh crore, viz. 27 per cent of total monetisation during FY2022-FY2025. By the end of FY2024, the NHAI (together with MoRTH) had realised around Rs 0.53 lakh crore (~33 per cent) across the two modes for monetising its assets.