Raajmarg InvIT IPO: the portfolio logic behind pooling India’s toll roads  

Raajmarg Infra Investment Trust, sponsored by the National Highways Authority of India (NHAI), pools five operational toll road stretches spanning roughly 260 km across Jharkhand, Andhra Pradesh, Tamil Naduand Karnataka. The InvIT, whose IPO opens on 11 March at INR 99–100 per unit, aggregates seven toll plazas that generated INR 967 crore in revenue in the last twelve months (Feb 2025–Jan 2026). 

Structured under the Toll-Operate-Transfer (TOT) model, the assets operate under 15-year concession agreements with toll escalation of 3% annually plus 40% of WPI inflation. NHAI will retain a 15% sponsor stake and has indicated a pipeline of around 1,500 km of additional highway assets that could be added over time. 

Across the portfolio, commercial vehicles account for roughly 73% of toll revenue, reflecting the location of several stretches on freight corridors. 

The Gorhar–Barwa Adda corridor in Jharkhand, running through the region’s coal belt, derives nearly 90% of its revenue from commercial vehicles, with the highest average toll in the portfolio at around INR 402 per vehicle. 

The Chilakaluripet–Vijayawada corridor in Andhra Pradesh, a manufacturing and port-linked route, also leans heavily commercial, with about 69% of revenue generated by freight traffic. 

These freight-heavy segments provide the portfolio’s yield, as trucks and multi-axle vehicles pay substantially higher tolls than passenger cars. 

Not all assets behave the same way. Some stretches are dominated by commuter traffic. 

On the Chennai Bypass, for example, passenger vehicles account for about 82% of traffic at the Vanagaram toll plaza, with non-commercial vehicles generating more than half of revenue. Average toll rates here are significantly lower—around INR 58 per vehicle—consistent with short-distance urban travel. 

Similarly, the Neelmangla–Tumkur stretch near Bengaluru sees passenger traffic exceed 50%, reflecting suburban commuting patterns. 

This mix creates two different revenue drivers within the portfolio: freight corridors tied to industrial activity, and commuter routes anchored by daily mobility. 

To test whether the portfolio genuinely reduces risk, we analysed 36 months of toll-plaza revenue data and calculated month-on-month growth correlations across the seven plazas. 

The average correlation is 0.46, indicating moderate linkage rather than uniform movement across assets. 

The diversification effect is visible in volatility. Individual plazas show average monthly revenue volatility of about 6.1%, while the combined portfolio reduces this to 4.4%—a decline of roughly 28%. 

For an InvIT whose primary purpose is to distribute stable cash flows, that reduction is significant. By combining freight-heavy highways with commuter corridors across different regions, the Raajmarg portfolio converts individually variable toll assets into a more predictable revenue stream.

The underlying toll-plaza traffic and revenue data used in this analysis are available on Thurro’s platform.  

Thurro does not make buy or sell recommendations on any security. This analysis is based on publicly available data and is intended for informational purposes only. It does not constitute investment advice. 

Cover photo credit: Petronet LNG Ltd

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