In the first highway monetisation instance of the current financial year, IRB Infrastructure is learnt to have emerged as the highest bidder for an operational asset being monetised through Toll Operate Transfer (TOT) mode. The company won the bid with an offer of Rs 9,200 crore for 333.4 km highway network in Uttar Pradesh, sources privy to the development said.
This marks a revival of investor interest in operational highways, especially those with high revenue potential.
The financial bids for the Uttar Pradesh NH bundle were opened earlier this week. The final approval of the bid will follow multiple layers of scrutiny.
The National Highways Authority of India (NHAI) has also enhanced its monetisation target for the current financial year to Rs 40,000 crore as against Rs 30,000 crore mentioned in the Union Budget, the sources said. In 2024-25 the highway builder raised Rs 28,724 crore through monetisation.
Of the total target for this year, Rs 15,000 crore each will come via the TOT and Infrastructure Investment Trust (InvIT) routes, and rest from project-based financing.
For 2025-26, the NHAI has identified 24 road assets with a total length of 1472 km for monetisation through ToT and InvIT, the sources added.
The highways that IRB had bid for are grouped under TOT-Bundle 17. It includes the sections from Lucknow to Ayodhya, Ayodhya to Gorakhpur and Lucknow to Sultanpur. This is the first monetisation through ToT after more than a year. ToT Bundle 16 was monetised in September last year.
Other than TOT-Bundle 17, bidding for another five bundles of highways is open. In the coming two to three months monetisation of some of them might be completed, Bids are open for ToT Bundle 18, 19, 20, 21 and 22. The total length of highways on offer on these five bundles is in excess of 845 km.
The Asset Monetisation Strategy of NHAI released in June has changed the strategy for monetisation through ToT. Every quarter NHAI was to offer three bundles for monetisation through this route. One bundle will be smaller with the potential to raise Rs. 2,000 crore, one medium that can bring in Rs. 5,000 crore and one large through which it can raise around Rs. 9,000 crore.
The NHAI and the government is currently sitting on Rs 15 lakh crore worth of highway assets that can be monetised, minister of road transport and highways Nitin Gadkari has said on many occasions.
Till date, 11 bundles of highway assets totalling 2564 km have been monetised through ToT which has brought in Rs 48,995 crore. The number of 11 because some of the bids that were called till round 16 were not completed.
Under TOT the highest bidder who also meets the technical criteria gets the right to collect toll on the highways it has won concession for. The concession period is 20 years after which the asset reverts to the NHAI.
The asset monetisation receipts are ploughed back to the NHAI for capital expenditure. Currently monetisation is meeting 10% of the total budgetary resources of the Ministry of Road Transport and Highways (MoRTH)