logo
Impact of ₹3,000 FASTag Pass on Toll Operators' Revenue, Reports Crisil, ET Infra

Impact of ₹3,000 FASTag Pass on Toll Operators' Revenue, Reports Crisil, ET Infra

Time of India25-06-2025
Advt
By ,
ETInfra
The Ministry of Road Transport and Highways' recent announcement of a ₹3,000 annual FASTag pass is poised to significantly benefit frequent private commuters, but it introduces a new dynamic for private toll operators , according to a recent report by CRISIL Ratings While the pass promises substantial savings for users, it is expected to impact toll collections, potentially necessitating compensation under existing concession agreements.According to the rating agency, the toll operators may see a revenue hit of 4-8 per cent. Private vehicles form 35-40 per cent of the overall traffic plying on the stretches in our sample. In terms of revenue, the share is lower at 25-30 per cent,' said Anand Kulkarni, Director, Crisil Ratings.He further said, 'Assuming a third of these vehicles purchase the annual pass, revenue of toll operators will be impacted by 4-8 per cent. This may need to be compensated for. Timely finalisation of the compensation mechanism and swift implementation will reinforce the confidence of the private sector which plays a key role in funding the growth of the sector.'The annual FASTag pass , set to be effective from August 15, 2025, will be applicable for private vehicles , including cars, vans, and jeeps, on national highways and national expressways. The pass offers coverage for up to 200 trips or one year from the date of activation, whichever comes first.Currently, a private vehicle typically incurs a toll of ₹70-80 per trip. With the new annual pass, commuters utilising it for 200 trips could realise savings of up to approximately 80 per cent, translating to ₹55-65 per trip.Saina S Kathawala, Associate Director, Crisil Ratings said, 'Credit profiles of our rated toll road projects are expected to withstand potential timing mismatches between implementation of the annual pass and finalisation of the compensation mechanism. If there is a six-month lag in receipt of first compensation and a third of private vehicles opt for the annual pass, the DSCRs4 will have a minimal impact this fiscal year.'
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Cement makers to regain decadal average profitability in 2025-26 over demand revival: Crisil
Cement makers to regain decadal average profitability in 2025-26 over demand revival: Crisil

India Gazette

time13 minutes ago

  • India Gazette

Cement makers to regain decadal average profitability in 2025-26 over demand revival: Crisil

New Delhi [India], July 7 (ANI): Growth in India's cement demand will recover to 6.5-7.5 per cent this fiscal (2025-26) after falling to 5 per cent in the recently concluded 2024-25 fiscal, according to a Crisil Ratings report. This, coupled with an uptick in realisations, will lift operating profitability by Rs 100 to a level just above the decadal average, the rating agency asserted in its report on Monday. Healthy accrual coupled with robust balance sheets will keep the credit profiles of cement makers stable, a Crisil analysis of 17 cement companies, accounting for over 85 per cent of domestic sales volume, found. Last fiscal, cement demand hit a soft patch in the first half and reported a tepid growth of 2-3 per cent owing to a slowdown in construction activities due to the general elections and erratic monsoon. However, there was a recovery in the second half, leading to annual demand growth of 5 per cent. Sehul Bhatt, Director, Crisil Intelligence, 'This fiscal, cement demand will be driven by a 7-8 per cent growth in the rural housing segment, which accounts for a third of the domestic demand.' 'Indeed, rural housing demand will replace the infrastructure segment as the primary demand driver this fiscal, owing to expectations of a rise in agricultural income on a likely healthy monsoon. Higher disposable income on account of lower interest rates and tax cuts, as well as benign inflation, will also support rural housing demand,' added Bhatt. On the other hand, the infrastructure segment, the second-largest contributor to cement demand with a 30 per cent share, is expected to grow at a relatively slow but steady pace, owing to the lower awarding of national highway projects in the previous two fiscal years and muted capital outlay growth for railways. Meanwhile, cement prices witnessed a healthy uptick in the first quarter of the current fiscal and are expected to rise 2-4 per cent this fiscal after two consecutive years of price lull, the rating agency said today in its report. Anand Kulkarni, Director, Crisil Ratings, 'Along with higher demand, a recovery in realisations, amid stable costs, will lift the operating profitability of cement makers to Rs 975-1,000 per tonne this fiscal against Rs 880 per tonne last fiscal and the decadal average of Rs 965 per tonne.' 'Increasing proportion of competitively sourced green energy in the power mix will lead to some savings in power and fuel costs. This will support profitability by offsetting the Rs 20-30 per tonne rise in raw material prices due to higher cost of limestone, fly ash and slag,' added Kulkarni. The resultant increase in cash accrual, according to Crisil Ratings, will reduce reliance on external borrowings to fund capital expenditure. 'That said, an extended monsoon impacting construction activity or lower infrastructure spend, which can affect demand, and any adverse movement in commodity and energy prices owing to global geopolitical tensions, which may dent profitability, will bear watching,' the rating agency concluded. (ANI)

Securitisation volumes rise 9% to Rs 49,000 crore in Q1FY26: CRISIL
Securitisation volumes rise 9% to Rs 49,000 crore in Q1FY26: CRISIL

Business Standard

timean hour ago

  • Business Standard

Securitisation volumes rise 9% to Rs 49,000 crore in Q1FY26: CRISIL

The sale of loans by banks and non-banking finance companies (NBFCs) through securitisation rose 9 per cent year-on-year (YoY) to Rs 49,000 crore in the quarter ended June 2025 (Q1FY26), according to credit rating agency CRISIL. NBFCs were the dominant players, recording a 24 per cent YoY rise in loan securitisation. The process involves pooling loans into a structured product and selling it to investors to generate liquidity. Lenders securitise loans through pass-through certificates (PTCs) or direct assignment (DA). NBFC-originated loans accounted for 92 per cent of the total securitisation market in Q1FY26, up from 74 per cent in the full financial year 2024–25 (FY25). Higher volumes from finance companies helped offset lower origination by banks, supporting overall securitisation growth, CRISIL said in a statement on Monday. The number of originators participating in these transactions stood at around 90. Total securitisation volumes were Rs 2.4 trillion in FY25, compared to Rs 1.9 trillion in FY24. Aparna Kirubakaran, Director, CRISIL Ratings, said: 'The top NBFCs have remained steadfast in tapping the securitisation market as a strategy for resource profile diversification. On the other hand, originations by small and mid-sized NBFCs—mostly present in microfinance, unsecured personal loans and business loan segments—moderated as both the NBFCs and investors remain cautious in these segments.' Bank-originated securitisation, dominated by a few large private sector banks, saw lower volumes amid a steady improvement in their credit–deposit ratios, the agency noted. In terms of asset classes, vehicle loans (including commercial vehicles and two-wheelers) maintained their dominant share at 41 per cent in Q1FY26. The share of mortgage-backed loans fell to around 21 per cent, down from 25 per cent in Q1FY25—largely due to lower volumes from a major private bank. Gold-loan securitisation rose sharply to 11 per cent in the quarter ended June 2025, up from negligible levels a year ago, aided by the lifting of regulatory restrictions on a key originator. Meanwhile, securitisation backed by microfinance loans declined to 11 per cent from 14 per cent, as the industry continues to recover from rising delinquencies by focusing on stronger underwriting and scaled-back disbursements, CRISIL added.

Gold loan sees fastest growth in overall securitisation volume in June quarter
Gold loan sees fastest growth in overall securitisation volume in June quarter

Time of India

time4 hours ago

  • Time of India

Gold loan sees fastest growth in overall securitisation volume in June quarter

Bundled pool of gold loans saw the fastest growth in the overall securitisation volume in the June quarter. Gold loan securitisation , which did not have much share in the total volume in the corresponding quarter last year, stood at Rs 5,390 crore or 11% of the total securitisation volume of Rs 49,000 crore, according to CRISIL Ratings . The rating agency said that the jump in the share of gold-loan securitisation is supported by lifting of regulatory curbs on a leading originator. Total volume of loan securitisation , which is a source of liquidity for banks and non-bank lenders as they club different loans and sell it to investors, jumped 9% YoY in the first quarter of the fiscal year. Share of vehicle loans (including commercial vehicles and two-wheelers) held steady at 41% in the June quarter, while that of mortgage-backed loans decreased to 21% from 25% in the first quarter of the previous fiscal. The decline is largely attributed to lower volumes originated by a large private bank. Live Events Similarly, securitisation backed by microfinance loans declined to 11% from 14%. The industry is trying to emerge out of rising delinquencies by focusing on strengthening underwriting processes and scaling back disbursements in the near term, CRISIL said. Meanwhile, the share of personal loans and business loans decreased 200 basis points each to around 9% and 7%, respectively. 'The top NBFCs have remained steadfast in tapping the securitisation market as a strategy for resource profile diversification. On the other hand, originations by small and mid-sized NBFCs - mostly present in microfinance, unsecured personal loans and business loan segments – has moderated as both, the NBFCs and investors, remain cautious in these segments,' said Aparna Kirubakaran, Director, Crisil Ratings.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store