NHAI remains upbeat about construction, awarding and monetization in FY23

New Delhi: Infrastructure companies, especially the road construction ones like Ashoka Buildcon, IRB Infra, PNC Infratech, Dilip Buildcon are in focus due to higher NHAI orderings and pickup in private CapEx. Antique Broking has recently hosted NHAI, where the authority has remained upbeat about construction, awarding and monetization in FY23.

FY22 slowdown in construction was due to natural calamities and Covid-19. In FY23, NHAI aims construction speed of 49kms per day. The apex highway authority is expected to award 8,700kms in FY23-as against 6,306kms in FY22.

The increase in awards, despite the limited budget, should be possible due to lower land acquisition costs. FY22 slowdown in construction can be attributed to multiple cyclones and heavy rains that impacted construction in the southern states.

Bharatmala Pariyojana phase-1 has over 16,000 kms residual which should be awarded before FY24 NHAI remains upbeat to tap other resources-more, particularly SPVs housing expressways.

The budgetary support for NHAI in FY23E is pegged at Rs 1.34lk crore, up by a meagre 3% annual growth and zero borrowings to rein in debt. More importantly, a major portion of this support will be funded through Central Road and Infrastructure Fund, which in turn is funded through levies and cess on fuel. In the near term, the authority directionally aims for securitization of Rs 20,000cr in FY23 which is almost double than the previous year.

NHAI has set an ambitious target to monetize 21,700 km of operational highway stretches in three years starting FY23. Monetization of the existing assets will be carried out through three routes: TOT, toll securitisation and InvITs.

The authority has proposed to tighten the minimum net-worth criteria for bidders to ensure that the successful bidder does not falter in achieving financial closure. Antique Stock Broking has picked KNR Construction as their top pick.

The BSE Infra Index has fallen by 3 percent this year, while the Sensex has reduced by 9 percent. Road construction stocks like NBCC, Dilip Buildcon, NCC and KNR Constructions have fallen between 22-60 percent this year.