The Indian government's ambitious asset recycling drive, aimed at generating funds for fresh infrastructure investments, is poised to achieve a record-breaking mop-up of approximately Rs 1.5 trillion in the current fiscal year. This figure represents the highest collection since the inception of the National Monetisation Pipeline (NMP) in 2021-22 and is driven predominantly by activities in the mining and highways sectors.
In the preceding fiscal years, transactions with a combined monetization value of around Rs 0.97 trillion were completed in 2021-22, followed by Rs 1.32 trillion in 2022-23. These transactions encompass revenues earned by various central and state government agencies, as well as private investments.
In the ongoing fiscal year, asset monetization continues to be spearheaded by coal blocks and other mines, with an anticipated achievement of approximately Rs 55,000-60,000 crore, surpassing the initial target of Rs 8,726 crore. The mining sector has consistently exceeded its targets, with revenues and capital expenditure reaching Rs 68,000 crore in FY23 against the original goal of Rs 6,060 crore. The revised target for mining monetization in FY24 is Rs 55,000 crore, and an official familiar with the matter revealed that around Rs 50,000 crore has already been accomplished.
The National Highways Authority of India (NHAI), a significant contributor to brownfield asset recycling in recent years, is expected to contribute around Rs 45,000 crore in the current fiscal, surpassing the FY24 target of Rs 43,979 crore. NHAI is adopting a mix of Toll Operate Transfer (ToT), securitization, and Infrastructure Investment Trust (InvIT) models to achieve this. The organization has raised Rs 15,968 crore through ToT and is set to mobilize additional funds through securitization and InvIT models.
The National Monetisation Pipeline, spanning four years from FY22 to FY25, encompasses an asset pipeline valued at around Rs 6 trillion. This initiative is designed to support investments under the National Infrastructure Pipeline, which aims to inject Rs 111 trillion into the economy over six years through FY25, promoting economic growth and job creation.
While asset recycling in the power sector (generation and transmission), oil and gas, and port infrastructure is expected to perform well in FY24, the railways sector is anticipated to show improvement compared to the previous year. However, sectors such as telecom, aviation, and warehousing are projected to have limited achievements.
The power generation and transmission sectors, having met their target of Rs 15,300 crore in FY23, are expected to perform favorably in FY24, achieving around Rs 20,000 crore against the initial target of Rs 26,700 crore. Railways, with a reduced target of Rs 20,000 crore for FY24, is projected to achieve Rs 8,000-10,000 crore, while the oil and gas sector has already achieved Rs 4,000 crore in monetization and could reach Rs 8,000 crore by March 2024. Monetization in urban real estate by the housing and urban development ministry is expected to contribute Rs 3,000-4,000 crore in FY24, with additional support from the monetization of container terminals at the V O Chidambaranar Port Authority in Tamil Nadu.
