Road infrastructure firms plan Rs 40,000 crore asset monetisation via InvITs: Report

New Delhi, July 13 (IANS) India’s road infrastructure developers are targeting asset monetisation worth around Rs 40,000 crore through Infrastructure Investment Trusts (InvITs) in FY27 as they seek to unlock capital, reduce leverage and support future expansion, according to a report released on Monday.

The report by Brickwork Ratings highlighted that the sector is also aiming for the award of nearly 10,000 km of new highway, expressway and high-speed corridor projects during the financial year, backed by continued government investment in road infrastructure.

The road infrastructure sector is expected to maintain a stable credit profile through FY27, supported by resilient toll collections, a healthy project pipeline and growing adoption of innovative financing models, it said.

Meanwhile, sector revenue is projected to grow 8.6 per cent in FY27, up from 7.3 per cent in FY26, while operating margins are expected to improve to 25.1 per cent from 24.3 per cent, aided by faster project execution and easing input costs.

Lower steel and bitumen prices, coupled with accelerated execution of existing projects are likely to support profitability.

Rising traffic on operational highway stretches is also expected to improve operating leverage by spreading fixed costs over higher revenue.

However, despite stronger earnings, debt servicing remains a challenge due to delayed payments and execution bottlenecks.

Debt service coverage is expected to remain around 0.5 times during FY26 and FY27, while interest coverage is projected to improve modestly from 1.3 times to 1.5 times, according to the report.

Moreover, developers are increasingly monetising operational road assets through InvITs to generate liquidity, repay debt and finance new projects, it added.

It further noted that counterparty risks in state-led projects, elongated receivable cycles and aggressive bidding continue to pose challenges for the sector.

–IANS

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