Not All Roads Lead to ‘A’—Fitch Flags Risks in India and China’s Toll Operators

Fitch Ratings has released its 2024 peer review of AsiaPacific toll road operators, highlighting strong traffic recovery, stable credit profiles, and key differences in financial resilience across the region. The report evaluates toll road issuers in India, China, and Australia, focusing on how traffic patterns, debt structures, and concession terms shape creditworthiness.

Key Highlights:

Traffic Resilience: Most toll roads have bounced back from pandemic lows, with demand holding steady across economic cycles
Credit Ratings: Majority of operators maintain investmentgrade ratings (‘A’ or ‘BBB’), though India’s IRB Infrastructure and China’s SZIH remain subinvestmentgrade due to weaker coverage ratios
Financial Drivers: Fitch emphasizes that leverage, debt maturity profiles, and coverage metrics are the main differentiators in credit strength—not pricing models or capital delivery capacity
Ownership Models: Indian and Australian toll roads are largely privately owned, while Chinese operators are often statebacked
Inflation Protection: Many toll roads benefit from inflationlinked pricing, helping maintain revenue stability
Operational Flexibility: The ability to cut costs, delay capex, or reduce dividends adds to resilience, as seen during COVID19 disruptions

The review suggests that while the sector is broadly stable, issuerspecific risks remain, especially for those with aggressive leverage or limited financial buffers. Investors are advised to focus on longterm concession structures and the sustainability of traffic volumes.

Source: Fitch Ratings, Economic Times, Infrastructure Today