NHAI offering 12-13% IRR to concessionaire for first bundle of TOT highways

The report said, a cluster of manufacturing industries and ports in Visakhapatnam, Kakinada, Kandla and Mundra are expected to be the drivers of transportation demand

Profitability or the return on equity for the highway monetisation contracts that the National Highways Authority of India (NHAI) is offering to the concessionaires is 12-13% of the equity, according to a report by rating agency CRISIL.

"The equity IRR (internal rate of return) of the first bundle of highways being auctioned under the toll-operate-transfer (TOT) model would range between 12% and 13%, based on NHAI's initial estimated concession value, an analysis by CRISIL Research shows. The level of bidding intensity will drive the final returns earned by the concessionaire," Crisil Research report said.

The bundle comprises nine highway stretches