Driving Growth: Fitch Ratings Highlights Strong Prospects for Indian Toll-Road Issuers

Fitch Ratings has released a report emphasizing the robust traffic growth prospects that underpin the ratings of Indian toll-road issuers. This growth is closely tied to India's economic development, with public infrastructure investments playing a pivotal role. Fitch relies on traffic growth forecasts, often derived from third-party reports, to evaluate the performance of toll-road projects. These forecasts suggest that traffic growth is expected to align with India's economic trajectory, influenced by the specific location and strategic importance of the assets.

 

The report highlights the investment-grade rating of Varanasi Aurangabad NH-2 Tollway Private Limited (BBB-/Stable), which reflects the strategic nature of its asset and its long-standing traffic history. Similarly, IRB Infrastructure Developers Ltd (BB+/Stable) benefits from its diverse and strategically located assets, supported by India's strong GDP growth.

 

Fitch also evaluates toll-road issuers based on their issuance structure, whether as holding companies or operating entities. Price risk for rated assets in India is generally mitigated through toll adjustments linked to inflation. The report addresses key investor concerns, including volume, price, construction, and debt structure risks, using metrics like the Debt Service Coverage Ratio (DSCR) and net debt-to-EBITDA ratio.

 

Sources: Fitch Ratings, India Toll-Road Projects: Q&A 2Q25.