IRB Infrastructure Developers has signed a share purchase agreement to shift Solapur Yedeshi Tollway and CG Tollway out of its GIC-backed private InvI
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India’s toll collections and vehicle sales are climbing, but highway project awards are not.
The National Highways Authority of India (NHAI) is deliberately slowing tendering to resolve land acquisition and environmental clearances before bids go out.
This structural shift is compressing near-term EPC pipelines and forcing road contractors to rebalance order books.
The numbers show the scale. NHAI has set a FY2027 target above 5,000 km, but averaged roughly 3,500 km over FY2024–FY2026.
Combined Ministry of Road Transport and Highways and NHAI awards moderated to 7,000–8,000 km annually over the three years through FY2026, down from about 12,000 km a year through FY2023.
ICRA Ltd's Suprio Banerjee calls the Q1 pace a downside risk to its 8,000–8,500 km full-year estimate.
Anand Kulkarni of Crisil Ratings frames the slowdown as largely structural—a deliberate shift toward awarding only after substantial land acquisition and key approvals are secured.
The intent is to shorten execution timelines, cut project risk, and improve cost efficiency.
The ministry flagged 524 sanctioned or awarded national highway projects that slipped past their schedules on land, clearances, utility shifting, and contractor performance.
Developers are absorbing the impact now.
IRB Infrastructure Developers reported no new order in the quarter because there was no award activity, with construction revenue down 20% year-on-year.
HG Infra Engineering, still heavily highway-exposed, saw revenue fall more than 40%.
Industry revenue was flat in FY25 and grew only 2–4% in FY26.
The strategic response is diversification.
Non-road and state road projects now account for nearly 70% of aggregate order books as of March 2026, versus under 20% in March 2020, as contractors pivot to power, railways, metro, and water.
Delay is also expensive.
Bharatmala Pariyojana Phase I—approved in 2017 for 34,800 km at Rs 5.35 lakh crore—has already reached Rs 8.53 lakh crore with 26,425 km awarded, driven by land and pre-construction bottlenecks.
Demand, however, remains firm.
User fee revenue rose from Rs 27,923.8 crore in FY21 to Rs 72,931 crore in FY25, estimated above Rs 82,000 crore in FY26.
The National Monetisation Pipeline 2.0 is targeting Rs 3.4 trillion from toll-operate-transfer and InvIT routes through FY2030—capital recycling that depends on operational assets, not new awards.
The signal: NHAI is absorbing pre-construction risk onto its own balance sheet to improve contract quality, but at the cost of volume.
That means:
- Fewer, better-prepared bids
- A capacity gap on congested corridors
- Contractors that are structurally less dependent on greenfield national highway awards than they were five years ago.
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