Maharashtra's new EV policy may take 'toll' on toll operators' cash flows

Toll waivers on major highways may impact cash flows of operators like IRB, but low EV penetration and expected compensation make long-term effect minimal

The new electric vehicle (EV) policy rolled out by the government of Maharashtra may impact the cash flows of toll road operating companies in the state in the short term.

 

However, industry experts believe the impact will be temporary, as the revenue loss due to the toll waiver is expected to be compensated by the state government under the ‘change in law’ clause of concession agreements. Additionally, EV penetration remains comparatively low.

 

“It’s not an upfront loss, yet from the cash flow point of view, the timing can be a challenge. If this policy is effective immediately, then in the absence of clarity on how those companies will be compensated, the cash flow impact will be immediate, because there are other ongoing liabilities like debt servicing or maintenance expenses. The operating expenses will have to be borne anyway. Their debt servicing also has to continue in case they have any borrowings,” said Rajashree Murkute, senior director at Care Ratings.

 

The new EV policy, cleared by the state government last week, waives toll fees for EVs on several key highways to encourage EV adoption across the state. These highways include the Mumbai–Pune Expressway (MPE), the Samruddhi Mahamarg (Mumbai–Nagpur Expressway), and the Mumbai Trans-Harbour Link – MTHL (Atal Setu). Moreover, toll fees across all Public Works Department (PWD) highways will be waived in a phased manner.

 

Of these, the MPE is operated by Mumbai-based IRB Infrastructure Developers, a listed transport infrastructure developer. The MPE generates the highest toll revenue for the company. In March 2025 alone, the MPE—along with the old Mumbai–Pune Highway—generated revenue of ₹153.6 crore for the company, up 3.64 per cent year-on-year (Y-o-Y).

 

MEP Infra and Ashoka Buildcon are the other listed toll collectors in the state.

 

Vinay Kumar G, vice-president and sector head, corporate ratings, Icra, believes that while toll revenue loss due to such exemptions is expected to be compensated by the authority, there may be a lag of a few months. However, during the concession period, the impact will be largely cash flow neutral for toll road companies.

 

Maharashtra ranks second in terms of EV ownership. According to Icra estimates, passenger cars contribute 35–40 per cent of the total traffic on state-operated tollways. However, the share of EVs within passenger car traffic is estimated to be in the low single digits. Therefore, the policy is “unlikely to have any material impact on toll collections,” said Kumar.

 

Explaining the potential impact, Hemal N Thakkar, senior practice leader and director, Crisil Intelligence, said, “In the case of passenger vehicles, EV penetration on roads in Maharashtra is less than 1 per cent. For buses, it is around 3 per cent—but most of these are interstate buses, so only a minimal number will pass through these toll plazas.”

 

Thakkar added that different toll operators manage plazas in various districts across Maharashtra, with a dynamic mix of intrastate and interstate vehicles. “The impact could differ from plaza to plaza across the state,” he said.

 

Through the latest policy, the government aims to boost EV sales across the state, with the policy remaining valid until 2030. It also seeks to enhance charging infrastructure with an outlay of ₹1,995 crore for various incentives, including the toll waiver.

 

Experts believe that for the policy to have a broader impact, EV charging infrastructure across the state must be developed to support adoption. “Without that, people do not have a clear incentive to shift from their current ownership preferences to EVs,” said Murkute.

 

“What actually gets impacted is revenue in the immediate scheme of things. But later, once clarity emerges on how the compensation is structured, the losses are likely to be recovered in future years. This is more of a timing-related issue,” she added.

 

Additionally, the method of computing and paying compensation will be critical for adherence to concession agreements on toll projects, said Divya Charen, associate director, India Ratings & Research.

 

The waiver will be implemented as and when the government issues relevant orders, according to an executive at the Mumbai Metropolitan Region Development Authority (MMRDA), which operates the MTHL through an agency.   

The road ahead  - Newpolicy cleared lastweek waives toll fees for EVs on several key highways

- Industry experts believe impact on cash flow would be temporary

- Revenue loss due to toll waiver would need to be compensated by the state

- Toll fees across all PWD highways would be waived in a phased manner