The National Highways Authority of India (NHAI) is set to establish a comprehensive asset register. This register will meticulously list highway stretches designated for private investors eager to engage in NHAI’s ambitious asset monetisation programme. This initiative, unveiled on Monday as part of NHAI’s inaugural ‘Asset Monetisation Strategy for the Road Sector,’ represents a pivotal shift towards sustainable, market-driven infrastructure financing, crucial for building resilient, eco-friendly, and equitable urban and rural networks across the nation.
The newly released document provides a structured framework, serving as a blueprint for raising capital through established models such as Toll-Operate-Transfer (ToT), Infrastructure Investment Trusts (InvITs), and innovative securitisation. These financial instruments have already played a significant role in NHAI’s funding, having successfully mobilised over ₹1.4 lakh crore across more than 6,100 kilometres of National Highways under the National Monetisation Pipeline. The introduction of a detailed asset register is expected to further streamline this process, making it more transparent and attractive for private capital.
According to the strategy document, the asset register will be a repository of all essential technical and financial details required for potential investors to accurately determine the monetisation potential of each asset. This includes specific criteria such as the age of the asset, the nature of the highway stretch, its historical revenue growth, the number of toll plazas within the project, and crucial legal compliance details to ensure it is “arbitration proof.” This meticulous data provision aims to instil confidence and facilitate informed decision-making among prospective investors, thereby enhancing the attractiveness of these assets.
A robust due diligence process, termed a “360-degree evaluation,” will be conducted for each asset. This will involve comprehensive field investigations to ascertain the existing quality of the highway, identify any requirements for capacity augmentation, and precisely determine its revenue potential based on traffic patterns and projections. This granular level of detail aims to provide investors with a clear and reliable understanding of the assets they are considering, fostering a climate of trust and reducing investment risks.
The overarching objective of the NHAI’s asset monetisation strategy is two-fold: to significantly broaden the investor base, thereby attracting a larger pool of private participation, and to substantially enhance stakeholder engagement to increase the traction of NHAI’s asset monetisation programme. While the strategy broadly encompasses various instruments, it places a particular focus on the ToT and InvIT models, which have proven effective in monetising operational infrastructure assets and providing stable, long-term returns for investors.
The strategy document clarifies that this framework is formulated for the medium term and is slated for revision after four years, specifically in FY29. This adaptive approach ensures that the strategy remains agile and responsive to evolving government policies, prevailing market conditions, and emergent circumstances, providing the necessary flexibility to navigate dynamic economic landscapes.
The monetisation of these assets is deemed crucial for NHAI, especially given its current leverage of approximately ₹2.8 lakh crore. By unlocking the value of existing operational assets, NHAI aims to generate a steady stream of funds. This capital can then be strategically reinvested into new and upcoming infrastructure projects, thereby reducing reliance on traditional borrowing and ensuring continuous development of India’s expansive national highway network. This shift towards an asset-light model for funding new projects is vital for long-term financial sustainability and accelerated infrastructure growth.
This innovative approach is not merely about financial mechanisms; it represents a deeper commitment to building robust, sustainable infrastructure that supports economic growth and enhances connectivity across India. By attracting private investment, NHAI aims to leverage private sector efficiencies, introduce advanced technologies, and ensure higher standards of maintenance and operation for highways. This ultimately contributes to a more efficient transport system, which is essential for reducing carbon emissions from logistics, fostering equitable access to markets, and supporting the development of smart, green cities nationwide.
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