About Highway Infrastructure Limited

BUSINESS OVERVIEW

Highway Infrastructure Limited (HIL) is an integrated infrastructure development and management company engaged in tollway collection, engineering, procurement, and construction (EPC) infrastructure, and real estate development. Among these, tollway collection is the primary revenue driver, followed by the EPC Infra segment, which includes construction of roads, bridges, tanks, irrigation systems, and civil buildings for various clients.

As of May 31, 2025, the consolidated order book stands at ₹6,663.07 million, comprising ₹595.30 million in tollway collection and ₹6,067.77 million in EPC Infra projects.

HIL is one of the few toll operators in India to manage toll collection using Automatic Number Plate Recognition (ANPR) technology, notably on the Delhi-Meerut Expressway. Toll operations extend across 11 states and one Union Territory, and are supported by advanced Electronic Toll Collection (ETC) systems that utilize RFID tags and digital payment methods. This ensures seamless, contactless transactions, reduced congestion, and enhanced operational efficiency.

To support working capital needs, the company utilizes a mix of fund-based and non-fund-based banking facilities. Fixed deposits are often maintained as cash margins to secure bank guarantees required for EPC and tollway contracts, contributing to the need for higher working capital.

In the tollway collection business, a total of 27 projects have been completed, with 4 projects currently operational. Toll contracts are typically awarded through competitive bidding, secured as H1 in toll projects and L1 in EPC Infra. The adoption of FASTag, made mandatory by the government in February 2021, along with the NETC platform, has significantly boosted digital toll payments. As of May 2025, 110 million FASTags were issued, with a collection of ₹71 billion, marking a strong year-on-year growth.

Government initiatives such as Toll-Operate-Transfer (TOT) have further enhanced revenue potential in the sector. NHAI monetized four TOT bundles (11 to 14) in FY24, raising ₹15,968 crore, contributing to a cumulative total of ₹42,334 crore. 

Key Differentiators in Toll Operations

• Technology Leadership: Among the few Indian operators utilizing ANPR-based tolling, integrating FASTag deduction with camera-based vehicle tracking systems.

• Operational Footprint: Toll operations span key expressways including Delhi-Meerut Expressway, Mokha Expressway (connecting Kandla and Mundra ports), and GT Road in Haryana and Punjab.

• Customer Service: Equipped toll plazas with multi-mode payment options, customer care centres, and user-friendly features to improve commuter experience.

• Data Security and Transparency: Operates under NHAI protocols, ensuring secure, traceable, and compliant toll operations.
  (Source: CareEdge Report)

EPC Infra Segment

The EPC Infra vertical has evolved with in-house capability to deliver end-to-end projects. As of May 31, 2025, 66 projects have been completed, 4 projects await certification, and 24 projects are under execution. Current operations are active across Indore, Bhopal, Dhar, Ratlam, and Khandwa in Madhya Pradesh.

Experience includes execution of diverse projects such as roads, bridges, irrigation systems, and public infrastructure. The client portfolio spans both public sector entities and private developers like Shubham City Homes, Shubham Builders, and Adroit Associates. HIL has also participated in national initiatives including PMAY, PMGSY, and Jal Jeevan Mission.

Real Estate Segment

The real estate segment, though the smallest, involves the development and sale of commercial and residential properties, including gated communities and housing projects.

Through its focus on toll and EPC Infra, the company has developed deep execution capabilities supported by its skilled workforce, equipment, and project management systems, enabling efficient delivery across diverse locations and project types. 

As on May 31, 2025, the company have 364 employees. The Banker to the company is Axis Bank Limited.

INDUSTRY ANALYSIS

Toll Operations and Road Infrastructure Market in India

Toll Collection Structure in India

Toll collection in India is primarily managed by the Central Government under the National Highway Fee (Determination of Rates and Collection) Rules. The system largely follows an open tolling structure, where tolls are charged every 60 kilometers along national highways, though this distance may vary depending on geographical or infrastructural constraints.

Toll collection generally starts once 75% of a highway project is completed, and initially applies only to completed stretches. Over time, toll rates are adjusted annually based on inflation indices, and then rounded off to the nearest ₹5. To promote equity and address local concerns, concessions are often extended to frequent users, especially those residing near toll plazas. Importantly, once the capital cost of a road project has been recovered, toll charges may be reduced by 40%, with the remaining revenue used for operations and maintenance.

Growth of India’s Road Network

India’s road network is the second largest in the world, spanning approximately 6.3 million kilometers as of March 2025. This includes national highways, state highways, and other rural and urban roads. The national highway network alone stands at 1.46 lakh kilometers, while state highways cover close to 1.8 lakh kilometers.

Since 2014, the government has aggressively expanded the highway network, with the length of national highways increasing by 60%. The number of four-lane or wider highways has grown 2.5 times, reaching nearly 46,000 kilometers. This surge in construction is also reflected in the pace of road building, which has jumped from around 11.6 kilometers per day in 2014 to over 34 kilometers per day by 2025. In financial terms, the Centre’s expenditure on road infrastructure has multiplied nearly tenfold in the last decade, reaching ₹4.59 trillion in FY24.

Toll Collection and FASTag Penetration

The toll collection landscape in India has undergone a digital transformation with the widespread adoption of FASTag. By May 2025, more than 110 million FASTags had been issued. In FY25 alone, toll collections through FASTag reached nearly ₹73,000 crore, spread across more than 420 crore transactions.

The jump from just ₹661 crore in FY17 to over ₹72,000 crore in FY25 illustrates the scale of this shift. In terms of volume, electronic toll collection (ETC) penetration has risen from 78% in early 2021 to over 98.5% by March 2024. This not only improves revenue efficiency but also reduces congestion at toll plazas and brings greater transparency to collections.

Market Size and Industry Outlook

India’s toll management services market was valued at ₹33 billion in FY24 and is growing at a robust annual rate of 14%. Over the long term, the market is projected to expand at a compound annual growth rate of 21% between FY21 and FY29.

The total tollable road length has also expanded significantly, reaching over 51,000 kilometers by March 2025, which marks a 75% increase compared to FY19. With the expected addition of 5,100 kilometers of new toll roads in FY25 and FY26, analysts anticipate toll revenues to grow by approximately ₹4,200 crore over this period. Additionally, the government has raised around ₹15,968 crore in FY24 alone through monetization of operational highway bundles under the Toll-Operate-Transfer (TOT) model, bringing the total raised to ₹42,334 crore since the model's introduction.

Key Players and Market Structure

The tolling landscape in India is dominated by the National Highways Authority of India (NHAI), which manages over 500 toll plazas—more than half the country’s total. Private players also play a significant role. IRB Infrastructure, for example, operates around 30 toll plazas, while L&T Infrastructure, Ashirwad Infra, and Reliance Infrastructure manage 20, 16, and 15 plazas respectively. As of June 2024, a total of 122 contractors had been empanelled for toll operations.

Toll-Operate-Transfer (TOT) Model and Private Sector Participation

The Toll-Operate-Transfer (TOT) model, introduced in 2016, has significantly reshaped toll road monetization. Under this model, operational highway assets are auctioned to private players for long-term (typically 15–30 years) toll collection rights, in exchange for an upfront payment to the government. These proceeds are then reinvested into new infrastructure projects.

The model has successfully attracted interest from global pension funds, infrastructure investors, and sovereign wealth funds, owing to its promise of long-term, predictable cash flows. As the government continues to scale this initiative, the TOT model is expected to play a pivotal role in financing India’s next wave of highway development.

BUSINESS STRENGTHS

Proven Execution Capabilities and Industry Experience
With nearly three decades of operational experience in toll collection and EPC infrastructure projects across multiple Indian states—including Madhya Pradesh, Gujarat, Andhra Pradesh, Punjab, Maharashtra, and Delhi—the company has demonstrated consistent execution capability. It is among the select operators managing toll collection through ANPR technology on the Delhi-Meerut Expressway and has operated key inter- and intra-state expressways. The use of Electronic Toll Collection (ETC) systems with RFID tags and digital platforms enhances operational efficiency and reduces congestion.

Experienced and Professional Leadership
The business is guided by a leadership team with strong technical, commercial, and managerial expertise. Key executives oversee overall planning, financial management, government liaison, operations, bidding, and project delivery—supported by skilled managerial and functional staff.

Robust Order Book and Financial Visibility
As of May 31, 2025, the consolidated order book stood at ₹6,663.07 million, comprising ₹595.30 million from toll collection and ₹6,067.77 million from EPC infrastructure. The order pipeline provides revenue visibility and aids in operational planning.

Diversified Business Portfolio
The company operates across tollway collection, EPC infrastructure, and real estate, enabling revenue diversification and reduced sectoral dependence. Additional income is generated through auxiliary activities such as equipment leasing and sale of surplus materials.

BUSINESS STRATEGIES

Continued Focus on Core Verticals
The company remains committed to strengthening its tollway collection and EPC infrastructure businesses, with a focus on improving overall financial performance.

Geographical Expansion
With project experience across multiple states including Madhya Pradesh, Gujarat, Andhra Pradesh, Punjab, Maharashtra, Telangana, Chhattisgarh, Haryana, Uttar Pradesh, Rajasthan, Odisha, and Delhi, the company aims to expand into new regions across India. This approach is intended to mitigate concentration risk and enhance market experience.

Exploration of Associated Business Segments
Leveraging industry expertise, the company is exploring aligned business verticals such as:

1. Way Side Amenities: Plans are underway to partner with NHAI to develop comprehensive roadside facilities across highways and expressways, including fuel stations, EV charging points, food courts, ATMs, medical clinics, and handicraft outlets, enhancing convenience for road users.

2. Hybrid Annuity Model (HAM) Projects: The company is evaluating participation in HAM-based infrastructure projects, which offer a balanced risk-sharing structure between government and private concessionaires, ensuring annuity-based revenue and long-term operational stability.

BUSINESS RISK FACTORS & CONCERNS

1. Revenue Concentration Risk
A significant portion of revenue from operations is derived from the tollway collection business, largely awarded by the National Highways Authority of India (NHAI). Additionally, most EPC infrastructure revenue comes from public sector clients. The loss or non-renewal of these contracts, particularly those in toll operations, may materially and adversely impact business and financial performance.

2. Geographic Concentration
Operations are relatively concentrated in specific regions, including ongoing projects in Madhya Pradesh, Maharashtra, Uttar Pradesh, and Haryana. Completed projects span across states like Gujarat, Punjab, Andhra Pradesh, and others. Any adverse developments in these regions may negatively affect financial and operational outcomes.

3. Limited Contract Tenure in Tollway Collection
Toll collection contracts awarded by NHAI are typically for a fixed period of one year, or until a new agency is appointed through a highest-bidder tendering process (H1 basis). The short tenure and competitive nature of bidding contribute to revenue uncertainty and a lack of long-term visibility.

4. Land Acquisition and Title Risks in EPC Infra Projects
EPC projects often require the government to hand over encumbrance-free land with clear title. Delays or failure in land acquisition or securing land rights may hinder timely project execution and affect contractual obligations.
Despite due diligence, land title verification remains a challenge in India due to presumptive title systems, fragmented ownership, and risks such as unregistered conveyances, encumbrances, adverse possession claims, and familial ownership disputes. These issues may result in delayed development, potential loss of development rights, cancellation of projects, or financial loss due to unmet deferred payment obligations.

Summary:
The company's revenue is heavily reliant on tollway and EPC projects awarded by public authorities, particularly NHAI. Regional and contract tenure concentration adds to financial uncertainty, while challenges in land acquisition and title verification pose operational risks for infrastructure development projects.