Toll-operate-transfer success unlikely to shadow M&As in the road sector

May help set valuation benchmarks

Last week, the National Highway Authority of India (NHAI)’s first batch of bidding out Toll-operate-transfer (TOT) projects saw bids 1.5 times higher from the base price. This overwhelming interest in TOT, industry experts say, is unlikely to slow down secondary market deals for road assets. Some, however, expect TOT bids to help set valuations better.

The road sector in the last two to three years time has seen a healthy trend of acquisitions, primarily driven by promoter companies selling road assets to reduce debt and adopt an asset-light strategy. Industry experts believe the acquisition trend is here to stay, with