Highway builders could get to exit projects early, easing fund crunch

“Infrastructure firms are now required to stay invested in a road project for years after completion, while they would like to exit after completion of a project and deploy the freed-up funds in fresh projects,” said a market analyst who did not wish to be quoted.

Shares of many highway builders which went public in the last 4-5 years are trading much below issue price. There have been no fresh equity issues of highway builders in the last 2-3 years. Thus, raising fresh funds through share sales seems unlikely, making exit important for companies.

“ There are many PE firms and investors interested in investing in completed road projects and not in the new projects. The government should not lose this opportunity and should rather cash in on the same during these tough times,” said a senior NHAI official.

Smoother ride

* Proposal to allow flexibility in allowing withdrawal of equity by concessionaires

* NHAI board to decide if company seeking exit is critical enough for the project

* BOT road projects awarded before 2009 do not have a complete exit option