Asset monetisation: Rs 1.4 trn raised, up 44% on year

The monetisation of public-sector brownfield assets unlocked capital worth Rs 1.4 trillion in FY23, up 44% on year. The achievement was against the target of Rs 1.62 trillion.

Coal blocks and other mineral assets, highway stretches and power transmission lines pushed the drive. The total monetisation value had stood at Rs 97,000 crore in FY22, including accruals and private investments, as against taggetted Rs 88,000 crore.

For the second consecutive year, the monetisation of coal and other mining assets has turned out to be much better than expected. While the target for this segment was enhanced to Rs37,500 crore from the initial goal of Rs6,060 crore for FY23, the achievement came in at around Rs 60,000 crore, an official said. In FY22 also, the mining sector had yielded upfront revenues and capital expenditure to the tune of Rs 58,000 crore against the target of Rs 3,394 crore.

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As against the proposed monetisation of road assets worth Rs 32,855 crore, the National Highways Authority of India (NHAI) has achieved about Rs 18,000 crore, reflecting a shortfall of about 45%.

The FY24 budget proposal on taxation of Infrastructure Investment Trust (InvITs) debt repayments delayed the InvITs of NHAI, leading to the shortfall. NHAI had plans to bring out InvITs worth Rs 10,000 crore in March. Addressing the investor concerns to some extent, the government lowered the tax incidence in the final version of the budget proposal that made income tax at a slab rate on amortisation of debt in the hands of InvITs unitholders only on the excess sum received by investors over the issue price. According to Sebi norms, 90% of the distributable cash of InvITs flows to the unit holders through interest, dividends and return of capital.

Power generation and transmission asset recycling fetched about Rs 16,000 crore in FY23 to NHPC, SJVN and NTPC as against the target of Rs 15,308 crore.

The aggregate asset pipeline under the NMP over the four years, FY22-FY25, is indicatively valued at Rs 6 trillion or about 14% of the central share of the National Infrastructure Pipeline (NIP) of Rs 43 trillion (out of a total Rs 111 trillion in six years through FY25).

Monetisation of assets identified under the NMP is envisaged either through structured public private partnerships (PPP) or through capital market-based instruments such as InvITs and securitisation of receivables.

Even though the railways’ target was reduced to about Rs 30,000 crore for FY23 from the initial aim of Rs 57,222 crore, it is understood to have missed the target by a wide margin. Despite its efforts, the transporter has made little progress to develop railway stations through the public-private-partnership (PPP) model.

The proposed recycling of a dozen airports to achieve monetisation of Rs 7,299 crore was also missed in FY23. The AAI could not take forward leasing of six airports – Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Trichy – for operation, management and development under the PPP.

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“The government is aggressive in resolving issues such as mode of monetisation to be adopted to fast-track monetisation of assets by the public sector entities,” the official said.

Power Grid, which had plans for InvITs worth Rs 7,700 crore in FY23, is understood to have dropped the plan in favour of monetising through securitisation of receivables from transmission lines.

The monetisation of public-sector brownfield assets unlocked capital worth Rs 1.4 trillion in FY23, up 44% on year. The achievement was against the target of Rs 1.62 trillion. 

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