Sector-specific valuation used to drive monetisation pipeline

The authorities has used 4 key strategies to reach at indicative worth of Rs 6 lakh crore price of belongings to be monetised beneath the National Monetisation Pipeline. This is predicated on the suitability of the valuation strategy to the character of the belongings and the accompanying income streams. For roads, energy transmission and telecom tower belongings, the federal government has used the market strategy, the place the worth is decided based mostly on comparable market transactions for the recognized asset courses.
In case of proposed monetisation of 26,700 km of nationwide highways, for instance, the indicative worth of Rs 1.6 lakh crore arrived at is predicated on common charge of Rs 6 crore per km. The per km estimated is predicated on current TOT (toll function switch) transactions and asset combine to be monetised. While common realisation by NHAI beneath previous TOT concessions efficiently awarded has been within the vary of Rs 9-14 crore per km, a decrease vary at Rs 6 crore per km has been assumed to consider sure decrease visitors stretches within the portfolio and affect of scale on monetisation.
This strategy has additionally been used to evaluate indicative worth of energy transmission belongings.The monetisation worth of the transmission belongings has been thought-about based mostly on an element of Rs 1.58 crore per circuit (ckt) km, based mostly on reference worth on PowerGrid’s lately closed InvIT. For complete belongings of 28,608 ckt km, the estimated worth involves Rs 45,200 crore.

Capex strategy has been thought-about for asset courses that could be monetised by PPP (public-private partnership)-based fashions envisaging capital expenditure by personal sector. The precept beneath the capex strategy is that within the absence of the asset monetisation transaction, the Public Asset Owner must incur the outlay in direction of augmentation and O&M (operations & upkeep) of the brownfield asset.

This technique has been deployed to worth most belongings in sectors together with ports, airports, railway stations, passenger trains, freight terminals, railway colonies redevelopment, monitor infra beneath devoted freight hall, sports activities stadium, warehousing, BharatNet fibre asset, mining, and concrete housing redevelopment.

Book-value strategy has been used for asset courses the place info on comparable market transactions or estimated capex funding isn’t out there. The e book worth of the belongings has been estimated contemplating the typical capex price incurred to assemble the same class of asset adjusted for the age of the asset and variety of years of operation. Power era belongings have been valued at e book worth.
Enterprise-value strategy has been thought-about for belongings the place info on present income stream is out there or will be moderately projected based mostly on assumptions and/or out there information on prevailing tariff for an asset/asset class. In such instances, internet current worth of discounted cashflows has been labored out to find out indicative monetisation worth. This technique has been used to worth pure gasoline and product pipelines in addition to for monitor, signalling, and overhead gear.