+
CRISIL: ARCs to See 700-1000 bps Recovery from Stressed Roads This Fiscal
ROADS & HIGHWAYS

CRISIL: ARCs to See 700-1000 bps Recovery from Stressed Roads This Fiscal

According to a report by CRISIL Ratings, asset reconstruction companies (ARCs) are expected to see their cumulative recovery rate for stressed road projects increase by 700-1000 basis points (bps) this fiscal year, following a rise to 50-55 per cent last fiscal. The report explained that this improvement would be driven by faster completion or descoping of pending construction, leading to the initiation of annuities by the National Highways Authority of India (NHAI). This, in turn, would enable quicker resolutions or debt restructuring. Additionally, the report noted that a significant increase in toll collections is expected to support the recoveries.

CRISIL Ratings analyzed the security receipts (SRs) rated by the firm, which cover approximately 2,500 lane kilometres of stressed road projects, with a total principal debt of around Rs 60 billion (representing about 60% of the road assets held by ARCs). These projects include those under the build-operate-transfer (BOT) model and the hybrid annuity model under NHAI, which ARCs acquired at an average haircut of 40 per cent.

The report also highlighted that most of the projects in the CRISIL Ratings SR portfolio became stressed between 2017 and 2019 due to delays in land acquisition and obtaining Right of Way (RoW) by the government, as well as lower-than-expected toll collections. Among these, half of the projects have completed construction, while the pending RoW issues for the rest of the assets have been resolved.

According to a report by CRISIL Ratings, asset reconstruction companies (ARCs) are expected to see their cumulative recovery rate for stressed road projects increase by 700-1000 basis points (bps) this fiscal year, following a rise to 50-55 per cent last fiscal. The report explained that this improvement would be driven by faster completion or descoping of pending construction, leading to the initiation of annuities by the National Highways Authority of India (NHAI). This, in turn, would enable quicker resolutions or debt restructuring. Additionally, the report noted that a significant increase in toll collections is expected to support the recoveries.CRISIL Ratings analyzed the security receipts (SRs) rated by the firm, which cover approximately 2,500 lane kilometres of stressed road projects, with a total principal debt of around Rs 60 billion (representing about 60% of the road assets held by ARCs). These projects include those under the build-operate-transfer (BOT) model and the hybrid annuity model under NHAI, which ARCs acquired at an average haircut of 40 per cent.The report also highlighted that most of the projects in the CRISIL Ratings SR portfolio became stressed between 2017 and 2019 due to delays in land acquisition and obtaining Right of Way (RoW) by the government, as well as lower-than-expected toll collections. Among these, half of the projects have completed construction, while the pending RoW issues for the rest of the assets have been resolved.

Next Story
Infrastructure Urban

India to Invest Rs 600 Billion to Upgrade 1,000 ITIs

As part of its drive to modernise vocational training, the Ministry of Skill Development and Entrepreneurship (MSDE), in collaboration with Gujarat’s Labour and Employment Department, held a State-Level Workshop at the NAMTECH Campus within IIT-Gandhinagar to discuss the National Scheme for ITI Upgradation.The consultation brought together key stakeholders from industry and the training ecosystem to align expectations and support implementation of the scheme, which aims to transform 1,000 Industrial Training Institutes (ITIs) across India using a hub-and-spoke model. The total outlay stands ..

Next Story
Infrastructure Urban

India Unveils Rs 600 Billion Maritime Finance Push

The Ministry of Ports, Shipping & Waterways (MoPSW) hosted the Maritime Financing Summit 2025 in New Delhi, bringing together over 250 stakeholders including policymakers, industry leaders, global investors, and financial institutions. The summit, held under the ambit of Maritime Amrit Kaal Vision (MAKV) 2047, focused on transforming India into a leading maritime power with strengthened financial, infrastructural, and technological capabilities.Union Minister Sarbananda Sonowal emphasised India's strategic progress, noting that average port turnaround times have dropped from four days to u..

Next Story
Infrastructure Urban

Govt Allocates Rs 500 Million To Boost Community Radio

The Central Government, through its ‘Supporting Community Radio Movement in India’ scheme, has allocated Rs 500 million to strengthen the community radio ecosystem across the country. The initiative aims to assist both newly established and long-operational Community Radio Stations (CRSs), ensuring their relevance to local educational, social, cultural, and developmental needs.According to the policy published by the Ministry of Information and Broadcasting, CRSs may be set up by not-for-profit organisations with at least three years of demonstrated community service. These stations are ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?