Crisil Expects FASTag Annual Pass to Impact Revenue of Toll Operators by 4 to 8%

The recent introduction of a FASTag annual pass priced at ₹3,000 is set to offer significant savings for frequent private vehicle users. However, this move is likely to impact toll revenue collections, especially for private toll road operators, creating a potential funding gap that may need compensation under existing concession agreements.

To address the anticipated shortfall in toll revenue, it will be essential to quickly finalise and implement a structured compensation mechanism. Until this is in place, the credit risk profiles of toll road operators rated by Crisil Ratings are expected to remain stable, supported by sufficient cash flow buffers.

Scope and Applicability of the Annual Pass

Starting August 15, 2025, the annual pass will apply to private vehicles—including cars, vans, and jeeps—on national highways and national expressways. The pass allows for up to 200 trips or one year of access from the date of activation, whichever comes first.

Based on current toll charges of ₹70–80 per trip, frequent travellers could realise substantial savings—up to ₹55–65 per trip, or roughly 80% if the full 200 trips are utilised. This makes the annual pass particularly attractive for daily or weekly commuters.

Operational Impact and Revenue Implications

Crisil Ratings’ evaluation of 40 operational toll road projects indicates that while there may be some short-term financial adjustments, the overall credit quality of toll operators is likely to remain steady. However, operators will now need to navigate a new reimbursement process involving the National Highways Authority of India (NHAI) rather than relying on real-time toll collections.

Though the shift in the payment mechanism adds complexity, the strong track record of timely payments by NHAI, especially in annuity-based projects, offers a degree of assurance and helps mitigate counterparty risk for toll operators.

Also Read: FASTag Annual Toll Pass Available from 15 August – Full Application Process & Eligibility Criteria

Anand Kulkarni, Director, Crisil Ratings said, “Private vehicles form 35-40% of the overall traffic plying on the stretches in our sample. In terms of revenue, the share is lower at 25-30%. Assuming a third of these vehicles purchase the annual pass, revenue of toll operators will be impacted by 4-8%. This may need to be compensated for. Timely finalisation of the compensation mechanism and swift implementation will reinforce the confidence of the private sector which plays a key role in funding the growth of the sector.”

Conclusion

The FASTag annual pass presents clear benefits for private commuters while posing manageable challenges for toll operators in the medium term. However, if the uptake of the annual pass exceeds expectations, it could lead to higher-than-projected revenue losses.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.