India's infrastructure boom: roads and renewables surge
ECONOMY & POLICY

India's infrastructure boom: roads and renewables surge

Mumbai: The infrastructure development landscape in India is poised for acceleration, with a projected 25% increase in road construction and a 33% rise in renewable energy projects over the next two years. This growth is being driven by companies capitalising on asset monetisation opportunities and reducing their leverage ratios, according to the assessment of credit rating agency Crisil.

Crisil predicts that road construction projects are set to reach up to 13,000 kilometres annually, a notable increase from the current 10,000 kilometres. The driving force behind this expansion is the Hybrid Annuity Model (HAM), which was introduced in 2016. This model has mitigated completion risks associated with road projects, thereby encouraging companies to actively bid for such projects.

Manish Gupta, Senior Director and Deputy Chief Ratings Officer at Crisil commented, "Investor engagement has been positive, with approximately Rs 750-800 billion being raised through equity and asset monetisation in both sectors over the past two fiscal years."

Gupta further stated, "Sustained emphasis on asset monetisation and equity mobilisation, coupled with robust cash flows, will maintain a balanced capital structure in both sectors."

Facilitating the ease of infrastructure development in India, companies are successfully attracting investors to invest in Infrastructure Investment Trusts (InvITs). These financial instruments are backed by the revenue generated from the underlying assets. The assets under the management of road-based InvITs nearly doubled, reaching Rs 1.3 Trillion between December 2022 and July 2023.

Mumbai: The infrastructure development landscape in India is poised for acceleration, with a projected 25% increase in road construction and a 33% rise in renewable energy projects over the next two years. This growth is being driven by companies capitalising on asset monetisation opportunities and reducing their leverage ratios, according to the assessment of credit rating agency Crisil.Crisil predicts that road construction projects are set to reach up to 13,000 kilometres annually, a notable increase from the current 10,000 kilometres. The driving force behind this expansion is the Hybrid Annuity Model (HAM), which was introduced in 2016. This model has mitigated completion risks associated with road projects, thereby encouraging companies to actively bid for such projects.Manish Gupta, Senior Director and Deputy Chief Ratings Officer at Crisil commented, Investor engagement has been positive, with approximately Rs 750-800 billion being raised through equity and asset monetisation in both sectors over the past two fiscal years.Gupta further stated, Sustained emphasis on asset monetisation and equity mobilisation, coupled with robust cash flows, will maintain a balanced capital structure in both sectors.Facilitating the ease of infrastructure development in India, companies are successfully attracting investors to invest in Infrastructure Investment Trusts (InvITs). These financial instruments are backed by the revenue generated from the underlying assets. The assets under the management of road-based InvITs nearly doubled, reaching Rs 1.3 Trillion between December 2022 and July 2023.

Next Story
Infrastructure Energy

J&K CM Rules Out Power Privatisation, Focuses on Sector Reform

Jammu and Kashmir Chief Minister Omar Abdullah has dismissed speculation regarding privatisation of electricity in the Union Territory, emphasising that his priority is to strengthen and reform the power sector.“We are not discussing privatisation. By reducing losses, improving billing efficiency, and enhancing revenue, there will be no need for it. My vision is to strengthen and reform the power sector in J&K,” Abdullah stated.He addressed the gathering at the 58th Engineers’ Day at SKICC on Monday evening, an event honouring Bharat Ratna Sir M Visvesvaraya for his pioneering contri..

Next Story
Infrastructure Urban

Mumbai’s Sassoon Dock to Get Tech-Driven Modernisation with Finland

The Maharashtra government, in collaboration with Finland, will modernise Mumbai’s historic Sassoon Dock using advanced technology, state minister Nitesh Rane announced on Wednesday.Rane met a delegation of Finnish officials and representatives of Finnish companies at the dock to discuss strategic plans for upgrading the facility in south Mumbai, according to an official statement.Built in the 19th century, Sassoon Dock is one of Mumbai’s oldest and busiest fishing harbours. Operations currently exceed its original capacity, raising concerns over hygiene, odour, fish handling standards, an..

Next Story
Infrastructure Energy

Agarwal Industrial Wins Rs 3.3 Billion IOCL Bitumen Tender

Agarwal Industrial Corporation rose 3.84 per cent to Rs 945.65 after announcing it had secured a prestigious tender from Indian Oil Corporation (IOCL) worth Rs 3.3 billion.In a regulatory filing during market hours, the company confirmed it had won the tender to supply Bulk Bitumen (VG-30 and VG-40 grades) to IOCL’s Kakinada locations.The firm quantity under the award totals around 60,500 tonnes across 11 parcels, while the optional quantity is approximately 33,000 tonnes across six parcels. This brings the total awarded quantity to roughly 93,500 tonnes. At current market prices, the firm o..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?