ICRA predicts about 21% rise in road construction in FY24

08 May 2023 CW Team

"With 55,000 km of projects in various levels of completion, the pipeline of projects is still strong.

This will increase execution to 12,000-12,500 km in FY2024, along with an emphasis on project completions before general elections. Prior to the general elections, the model code of conduct will be in effect during Q4 of FY2024 (Q4 normally accounts for 50-60% of awards in a year). As a result, the awarding activity in FY2024 is likely to be influenced, and the total awards are predicted to fall from 12,375 km in FY2023, to 9,000-9,500 km. In FY2024, awards made under the EPC will still account for 70%–75% of all awards. Less than 5% of the orders over the previous five years came through BOT-Toll awards, and the percentage is anticipated to be the same in FY2024.

While the bid competitive intensity for EPC projects remained high, it is noteworthy that in FY2023, this trend also caught up with the HAM projects, with nearly 40% of the HAM bids coming in below the authority bid price. From values exceeding 20% in FY2019 to FY2021, the median premium dropped to 15% in FY2022 and 4% on FY2023, respectively.

The inflation-linked toll hike is only 1.3-5% in FY2024, which is relatively low given the lowering WPI inflation. As a result, it is predicted that toll revenue will increase by 6% to 9% in FY2024, largely due to a 4-5% increase in traffic. Despite the slowing in toll collection growth, the debt coverage metrics for BOT toll road assets should be supported by lower outlays for O&M and major maintenance due to recent moderation in key commodity prices, especially bitumen. For FY2024, ICRA's outlook on toll roads is unchanged, he continued.

ICRA anticipates a significant rise in road construction activity of 16-21% to 12,000-12,500 km in FY24 due to a strong project pipeline, increased government capital spending, and an emphasis on project completions in advance of the general elections. ICRA estimates that in FY24, toll revenue will increase by 6-9%, mostly due to a 4-5% increase in traffic. Due to elevated commodity costs and protracted monsoons in some regions, which reduced the number of productive days, the execution suffered in H1 FY2023. According to Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, the situation improved in H2 FY2023 with road construction recording a YoY growth of 2%, hence keeping the overall decline at 1% in FY2023 (to 10,331 km from 10,457 km in FY2022). With 55,000 km of projects in various levels of completion, the pipeline of projects is still strong. This will increase execution to 12,000-12,500 km in FY2024, along with an emphasis on project completions before general elections. Prior to the general elections, the model code of conduct will be in effect during Q4 of FY2024 (Q4 normally accounts for 50-60% of awards in a year). As a result, the awarding activity in FY2024 is likely to be influenced, and the total awards are predicted to fall from 12,375 km in FY2023, to 9,000-9,500 km. In FY2024, awards made under the EPC will still account for 70%–75% of all awards. Less than 5% of the orders over the previous five years came through BOT-Toll awards, and the percentage is anticipated to be the same in FY2024. While the bid competitive intensity for EPC projects remained high, it is noteworthy that in FY2023, this trend also caught up with the HAM projects, with nearly 40% of the HAM bids coming in below the authority bid price. From values exceeding 20% in FY2019 to FY2021, the median premium dropped to 15% in FY2022 and 4% on FY2023, respectively. The inflation-linked toll hike is only 1.3-5% in FY2024, which is relatively low given the lowering WPI inflation. As a result, it is predicted that toll revenue will increase by 6% to 9% in FY2024, largely due to a 4-5% increase in traffic. Despite the slowing in toll collection growth, the debt coverage metrics for BOT toll road assets should be supported by lower outlays for O&M and major maintenance due to recent moderation in key commodity prices, especially bitumen. For FY2024, ICRA's outlook on toll roads is unchanged, he continued.

Technology

17 Jul 2026

TANAKA commissions 500 kW hydrogen fuel cell facility

TANAKA Precious Metal Technologies has commissioned TANAKA H2 Nexus, a 500-kW pure hydrogen fuel cell power generation facility at its Shonan plant in Hiratsuka, Kanagawa Prefecture, Japan. The company said the installation is among the country's largest hydrogen fuel cell power generation facilities and began operations on July 8, 2026.Powered entirely by pure hydrogen, the facility is expected to supply around 34 per cent of the electricity consumed by the adjacent Shonan manufacturing plant when operating at full capacity. According to the company, the project will support its long-term str..

Real Estate

17 Jul 2026

KONE Expands Bengaluru Office to Strengthen South India Reach

KONE Elevator India has expanded its Bengaluru Branch and South Regional Office in Hebbal, strengthening its operations across Karnataka and South India.The facility will support sales, installation, service and modernisation activities across Karnataka while providing regional leadership and operational support for the company’s South India business. It was inaugurated by Amit Gossain, Managing Director, KONE Elevator India and South Asia, and Murali Malayappan, Chairman and Managing Director, Shriram Properties.The office will support customers in Bengaluru, Mysuru, Mandya, Kolar, Tumakuru..

Real Estate

16 Jul 2026

VeARC leases 27,000 sq ft office space in Bengaluru

VeARC India has leased approximately 27,000 sq ft of office space at The Executive Centre's (TEC) Helios Business Park on Outer Ring Road (ORR), Bengaluru, to support the expansion of its Global Capability Centre (GCC) operations.The new workspace accommodates more than 450 workstations and is intended to support the company's growing workforce in India. VeARC India serves as the Global Capability Centre for Long Arc Capital.Located on Bengaluru's Outer Ring Road, the office provides access to one of the city's key technology and business corridors. The expansion comes amid continued growth in..