According to a recently released report by rating firm ICRA, asset sales in the road sector have picked up over the last 24 months with the relaxation in exit policy. Sponsors in around 20 road assets involving a total cost of Rs.123.27 billion have monetised their assets as opposed to around Rs.70 billion in the preceding 50 months. Three out of the 20 are state road projects and the remaining are national highway projects. Out of 17 NH projects, 16 were awarded before 2009 and are the direct beneficiaries of the policy decision on relaxation of the exit policy for projects awarded before 2009 in May 2015.
In May, 2015, the Cabinet Committee on Economic Affairs (CCEA) relaxed the exit policy for projects awarded before 2009, allowing 100% equity divestment by the developers as against 74% earlier. This move not only attracted private equity players who are more comfortable when they own 100% stake in the projects, but also enabled the unlocking of additional 26% of the developers’ equity invested in about 5600 km of NH projects, awarded under the public private partnership (PPP) mode.