Expected Increase in M&A and Refinancing Activity for HAM Projects in India: ICRA

According to the ratings agency ICRA, there is expected to be an increase in mergers and acquisitions (M&A) and refinancing activity in highway asset management (HAM) projects in the upcoming quarters. Approximately 105 HAM projects, with a total bid project cost of INR 1.22 lakh crore, are expected to become operational in the next two years, and around INR 0.90 lakh crore of debt associated with these projects could potentially be refinanced.

Around 280 projects with a total bid project cost (BPC) of Rs. 3.21 lakh crore were awarded under HAM model till September 2022 since its introduction in January 2016. HAM accounted for around 40% of the total projects awards by the NHAI during FY2016 and H1 FY2023. Further, HAM is expected to account for around 45-50% of the NHAI awards in FY2023 and FY2024. Of the HAM projects awarded since January 2016, a total of 71 projects with cumulative BPC of Rs. 80,818 crore became operational during FY2019-H1FY2023. Of this, 23 projects with a cumulative BPC of Rs. 27,446 crore (34%) were sold to InvITs and PE players in the last two years.

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