India Ratings and Research, a part of the Fitch Group, mentioned that there might be impending stress in highway projects, particularly those awarded through the National Highways Authority of India's (NHAI) annual payments model Hybrid Annuity Model (HAM). They suggested that some developers are facing challenges in achieving financial closure, while authorities are encountering delays in land acquisition. According to Vishal Kotecha, director and head at India Ratings and Research, certain parts of the sector have experienced excessive competition historically. He noted that while small and medium-sized players have generally managed to execute projects, newer sponsors could encounter difficulties. He added that they observed some HAM projects undergoing substitution. Experts have previously pointed out that the road sector has witnessed heightened competition over the years, resulting in decreased bid premiums and potentially attracting players without significant stakes. Some of these developers are now encountering hurdles in obtaining financing for their projects. India Ratings and Research highlighted that new developers, many of whom shifted from engineering, procurement, and construction (EPC) to HAM after the relaxation of technical and financial norms, are struggling to secure funding. This is because banks have tightened capital requirements. The agency mentioned that the number of projects awaiting the appointed date has risen to more than 110 projects, valued at over Rs 1 trillion. Financially robust and medium sponsors are facing delays primarily due to land acquisition issues. Despite these challenges, the agency maintained a stable outlook for both annuity projects and toll-collecting assets for the fiscal year 2024-25. This is not the first instance where a rating agency has highlighted concerns within the sector. Earlier this month, CareEdge also reported delays in HAM projects.