Asset monetisation: Record mop-up of Rs 1.5 trn likely in FY24; Mining and highways to contribute over Rs 1 trn

Container terminals at the V O Chidambaranar Port Authority located in Tamil Nadu’s Thooth would also aid the monetisation of ports in FY24.

Led by mining and highways, the Centre’s asset recycling drive to generate resources for fresh investments in infrastructure will likely yield around Rs 1.5 trillion in the current fiscal, the highest mop-up since the National Monetisation Pipeline (NMP) was rolled out in 2021-22.

Transactions with aggregate monetisation values of around Rs 0.97 trillion was completed in 2021-22 and Rs 1.32 trillion in 2022-23. These include revenues accrued to various central/state government agencies and private investments.

Like in the previous years, the monetisation of assets in 2023-24 was led by coal blocks and other mines with the achievement expected to be around Rs 55,000-60,000 crore as against the original target of Rs 8,726 crore. While the target for this segment was enhanced to Rs 37,500 crore from the initial goal of Rs 6,060 crore for FY23, the achievement came in at around Rs 68,000 crore.

Also ReadWeb portal to promote food product exports launched in Rajasthan

In FY22 also, the mining sector had yielded upfront revenues and capital expenditure to the tune of Rs 68,000 crore against the target of Rs 3,394 crore. The due date for a fresh round of coal mining bidding is January 29, 2024.

“The revised target of monetisation from mining is Rs 55,000 crore for FY24, of which around Rs 50,000 crore is already done. So, we will cross the target this year,” an official aware of the matter told FE.

The National Highways Authority of India (NHAI), which has been the second biggest contributor to brownfield asset recycling in the past two years, will likely achieve around Rs 45,000 crore as against the target of Rs 43,979 crore for FY24, through a mix of Toll Operate Transfer (ToT), securitisation and Infrastructure investment trust (InvIT) models. It has already raised Rs 15,968 crore via ToT this year. It has also initiated ToT for 375 km long three highway stretches in the states of Telangana and Tamil Nadu. NHAI will also mobilize around Rs 9000 crore through securitisation and 15,000 crore through InvIT this year.

The aggregate asset pipeline under the NMP over the four years, FY22-FY25, is indicatively valued at Rs 6 trillion, which would support investments under the National Infrastructure Pipeline worth Rs 111 trillion in six years through FY25. The NIP-NMP are designed to kick-start investment-led economic activity to boost growth and job creation.

Among others, asset recycling in power sector generation & transmission, oil & gas and port infrastructure are expected to do well in FY24, another official said. Railways, though lagging, will do relatively better compared to the previous year while the telecom, aviation and warehousing sectors won’t achieve much this year.

The power generation and transmission sectors, which met their combined target of Rs 15,300 crore in FY23, are likely to do well in FY24 with an achievement of around Rs 20,000 crore as against the initial target of Rs 26,700 crore, the second official said.

Also ReadSwitzerland and India reach deal on free trade agreement

Railways, whose target was reduced to Rs 20,000 crore for FY24 from Rs 44,907 crore, is seen achieving around Rs 8,000-10,000 crore compared with Rs 8,000 crore in FY23. While railways has not progressed much in the monetisation of key assets such as stations, it would complete some transactions in railway colony redevelopment, Gati Shakti freight terminals and rolling stock.

Among others, the oil and gas sector has already achieved around Rs 4,000 crore in monetisation and could reach Rs 8,000 crore by March this year, aided by discovered small field (DSF) bid rounds. Among others, the housing and urban development ministry has achieved monetisation worth Rs 3,000-4000 crore in urban real estate in FY24.

Container terminals at the V O Chidambaranar Port Authority located in Tamil Nadu’s Thooth would also aid the monetisation of ports in FY24.