52 Road Projects Worth Rs 37,019 Crore Sold: Significantly Improved Refinancing Ability Of Projects, Says ICRA 

According to recently released report, a total of 52 road projects worth Rs 37,019 crore were sold between 2015 and 2018, indicating a spurt in merger and acquisitions (M&A) in the domestic road sector, reports The Hindu BusinessLine (BL).

“Out of the total 52 projects, six were sold at a discount and 46 at a premium (ranging between 2 and 21 per cent returns),” said Rajeshwar Burla, AVP and Associate Head, Corporate Ratings, ICRA. “Many projects have refinanced debt with elongated tenure and lower interest rate. Around one-third of the assets witnessed steep rating upgrades.”

Burla added that the change in ownership of road projects has “significantly improved the refinancing ability of the projects.” These positive developments indicate improving liquidity situation in the road sector and upbeat sentiment about its prospects.

According to ICRA, the asset sale transactions have been driven by lenders Reserve Bank of India’s (RBI) 12 February (2018) circular that forced banks to resolve stressed assets at the earliest. Also, the government’s relaxed exit policy for the promoters of these projects.

More Highways Built By The NDA Government

The Narendra Modi government has built National Highways totalling 31,000 kilometres in over four years. This is 26 per cent more than the Congress-led United Progressive Alliance (UPA) government’s five years total of 24,425 km. By March 2019, the government will have constructed highways totalling 39,000 km, 60 per cent more than the total construction between 2009 and 2014.

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