According to Motilal Oswal Financial Services, from April to July 2023, the National Highways Authority of India (NHAI) awarded a total of eight projects, compared to 12 projects awarded during the same period in FY23. The cumulative length of these awarded projects during April to July 2023 was approximately 160 kilometres, down from the 250 kilometres awarded in April to July 2022, with a total value of Rs 25 billion.As of August 2023, NHAI had awarded projects covering a total distance of 170 kilometres, and construction work had commenced on projects totalling 1,215 kilometres. The awarding of projects under the Hybrid Annuity Model (HAM) continued to dominate both in terms of value and the number of projects awarded, with 73 kilometres awarded, worth Rs 19 billion over the April to July 2023 period.FAStag toll collections witnessed a 14.4 per cent year-on-year increase from April 2023 to July 2023, accompanied by a 21.7 per cent year-on-year increase in collection value. This growth in toll collections is instrumental in expediting the monetisation of road assets by the Ministry and offers advantages to companies seeking to monetise their existing toll assets.Asset monetisation remains a focal point for NHAI, with a list of 46 projects spanning over 2,612 kilometers earmarked for monetisation in FY24. NHAI's target for FY24 is to raise between Rs 100 billion to Rs 150 billion through asset monetisation under the Toll-Operate-Transfer (ToT) strategy. In total, NHAI aims to generate up to Rs 450 billion through monetisation in FY24, utilising various funding models, including Infrastructure Investment Trusts and the securitisation of road assets constructed by NHAI's Special Purpose Vehicles (SPVs).Steel prices have seen a decrease of approximately 25 per cent, while aluminum prices have declined by about 33 per cent since April 22. In contrast, cement prices have raised by around 5 per cent from their lows in July 22, primarily due to input cost pressures. With a stable outlook for commodity prices, road contractors anticipate an improvement in profitability and margins in FY24.Despite a slower pace of project awarding until August 2023, there exists a robust pipeline of tenders. Entities with substantial order backlogs, strong financial positions, and diverse sector engagement are well-positioned to benefit from NHAI's proactive approach to project allocation in FY24. Motilal Oswal's top choice in this sector is KNR Constructions Ltd. If you want to learn more about Indian Roads, make sure you sign-up for the India Roads Conference at the India Construction Festival on October 12th in New Delhi Click HERE and reserve your seats! Or call Deepali on 82919 95574....