$258 bn market by 2028: InvITs are becoming India's hottest asset class

Business Standard

3 hours ago

In India, there are currently five REITs and seventeen InvITs listed in the stock exchange, with a combined market capitalization of $33.2 bn.
Sunainaa Chadha NEW DELHI
India's Infrastructure Investment Trust (InvIT) market is projected to expand 3.5 times to $258 billion by 2030, according to a new study by Knight Frank India. The report highlights India's emergence as a global magnet for infrastructure capital, supported by government policies, growing institutional interest, and a pipeline of brownfield and greenfield projects.
InvITs Outpace REITs in India
As of FY 2025, the Assets Under Management (AUM) of InvITs in India stands at $73.3 billion, nearly 3.5 times higher than the $20.6 billion managed by REITs. Together, InvITs and REITs have grown their combined AUM to U$93.9 billion in FY 2025, more than double the $42.1 billion recorded in FY 2020.
The central government's infrastructure spending has risen sharply, climbing from $12 billion in FY 2015 to USD 75 billion in FY 2025 — a 6.2x increase. Spending as a share of GDP has also tripled from 0.6% to 2.0%.
According to Knight Frank, India's ambition of becoming a $ 7 trillion economy by 2030 will require USD 2.2 trillion in infrastructure investment. InvITs are expected to play a pivotal role by channeling domestic pension and insurance funds, foreign institutional capital, and retail investments into operational assets, unlocking much-needed capital for fresh projects.
Globally, there are over 1,000 publicly listed REITs and InvITs also termed as master business trusts, boasting a combined market capitalisation of approximately USD 3 trillion (tn). In India, there are currently five REITs and seventeen InvITs listed in the stock exchange, with a combined market capitalization of $33.2 bn.
"The challenge and opportunity lie in broadening participation — from pension and insurance funds to retail investors — while maintaining the transparency and governance standards that have underpinned the sector's credibility. InvITs have the potential to become the cornerstone of India's infrastructure financing ecosystem and a magnet for global infrastructure capital," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Source: Respective company reports, Knight Frank Research; Note: Estimated till FY 2025
Policy Push: NMP 2.0
The government's National Monetisation Pipeline (NMP) has been central to the sector's growth. The first phase (FY 2021–25) achieved 95% of its Rs 6 trillion target. Building on this momentum, NMP 2.0 aims to monetise INR 10 trillion worth of assets by 2030, with InvITs positioned as a key vehicle for capital mobilisation.
The potential for InvIT expansion in India remains significant across multiple infrastructure sectors. In roads, InvITs are the largest segment by value, comprise only 21% of operating NHAI toll assets, leaving ample scope for monetisation. In renewable energy, despite installed solar capacity exceeding 98 GW, InvITs manage just 2% of operational assets, with the government targeting 230 GW by 2030. In logistics, only 39 mn sq ft of the 479 mn sq ft controlled by private operators is within InvIT structures.
Airports, ports, and wind energy are seeing greater private participation through PPPs and concessions, yet InvIT penetration is not yet visible.
Stable revenue models remain a challenge, but measures such as risk-sharing mechanisms, credit enhancement facilities, Viability Gap Funding, long-term agreements, and predictable regulation can strengthen investor confidence.
"Opportunities go beyond existing assets, with capacity expansions planned in roads, renewable energy, ports, airports, power transmission, and logistics driven by economic growth, urbanisation, and industrialisation. Supported by PPP policies and the INR 10 trn monetisation target under NMP 2.0 by 2030, this creates a sizeable addressable market. Overall, the InvIT market in India could reach approximately $258 bn by 2030, scaling existing sectors and bringing underrepresented asset classes into the fold," noted the report.
Global Positioning and Comparative Scale
India's REIT and InvIT market ranks fourth in Asia in terms of total market capitalisation, behind Japan, Singapore, and Hong Kong. However, India's growth trajectory is among the fastest in the region, particularly in InvITs.
The report identifies several strategies to unlock the next phase of InvIT growth:
Expanding Retail Participation: Increasing awareness and accessibility of InvITs through targeted investor education campaigns, simplified investment processes, and inclusion in mainstream wealth management offerings.
Hedging Currency Risk for Foreign Investors: Offering cost-effective currency hedging tools to mitigate forex volatility and encourage higher foreign capital inflows.
Broadening Domestic Institutional Exposure: Raising exposure limits for pension and insurance funds and encouraging public sector financial institutions to participate more actively.
Diversification of Sectors: Bringing new asset categories such as data centres, urban transport, and water infrastructure into the InvIT framework to broaden the investment base.
"The next chapter for India's InvIT market will be about depth and diversity. Institutional investors, especially sovereign and global pension funds, have already anchored the market. The task now is to unlock larger pools of domestic long-term capital, particularly from insurance and pension funds, where current exposure is only 3–5 percent. At the same time, expanding the scope of InvIT assets to include emerging infrastructure categories will further enhance investor interest," said Rajeev Vijay, Executive Director - Government and Infrastructure Advisory, Knight Frank India.
Key Sectors with Untapped Potential
InvIT opportunities span across multiple asset classes, with roads, energy, and telecom infrastructure leading the way:
Roads: InvITs currently manage 21% of operating NHAI toll assets, leaving significant scope for monetisation.
Renewable Energy: Despite solar capacity exceeding 98 GW, InvIT penetration is just ~2%, with the government targeting 230 GW by 2030.
Telecom: InvITs hold 250,000 towers (33% share), with scope to expand as India aims for 12 lakh towers by 2030.