Latest news with #InvITs
New Indian Express
4 days ago
- Business
- New Indian Express
infrastructure investment trusts' AUM to touch Rs 8 lakh crore by 2027: Crisil
CHENNAI: The asset under management (AUM) of infrastructure investment trusts (InvITs) is projected to rise to around Rs 8 lakh crore by fiscal 2027 from approximately Rs 6.3 lakh crore in fiscal 2025, estimates rating agency Crisil Ratings. The increase will be largely driven by asset acquisitions by mature trusts, the rating agency said. Although this growth will lead to higher leverage, InvIT credit profiles are expected to remain stable, supported by the quality of underlying assets, predictable cash flows, and structural mechanisms such as cash flow pooling and regulatory safeguards. Asset additions remain key for InvIT growth, given the finite life of infrastructure assets. AUM is expected to rise by Rs 1.7–1.8 lakh crore over fiscal 2025 and 2026, slightly below the Rs 2.0 lakh crore added over the past two fiscals. The roads sector is likely to account for nearly 80% of the incremental AUM, consistent with recent trends. Sectors such as renewable energy, transmission, and warehousing will also contribute, though to a smaller extent. Their lower share is attributed to factors such as high upfront leverage requiring deleveraging, availability of capital outside the InvIT structure, and limited operational asset inventory. Manish Gupta, Deputy Chief Ratings Officer at Crisil Ratings, said: 'Mature trusts are expected to contribute 80–85% of incremental AUM over the next two fiscals, up from around 65% in the prior two. Acquisitions tend to raise leverage as the acquired assets typically carry higher debt. For example, leverage for InvITs with 2–5 years of operations rose from 43% in March 2023 to 47% in March 2025, due to acquisitions. With most InvITs now operationally stable, overall leverage is expected to reach ~50% by fiscal 2027.'
Economic Times
5 days ago
- Business
- Economic Times
Three Indian infra investment trusts eye $500 million debt in coming weeks, sources say
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Three Indian infrastructure investment trusts , including the National Highways Infrastructure Trust , are planning to raise up to 43 billion rupees ($499 million) through corporate bonds in the coming weeks, three sources familiar with the matter is in talks with merchant bankers and investors to raise around 15 billion rupees through three-year bonds, the sources, who did not want to be named because the discussions are private, said. Cube Highways Trust is likely to tap the market for about 10 billion rupees in debt, with maturities ranging between three and five IRB Infrastructure Trust is preparing for its debut bond issuance, targeting roughly 18 billion rupees through a dual-tranche offering with five and 10-year tenors. None of the infrastructure investment trusts , or InvITs, responded to Reuters emails seeking typically raise capital through a combination of units and issuances have gained traction in recent months amid falling yields. According to Prime Database, InvITs and real estate investment trusts (REITs) together raised more than 178 billion rupees in the January-June three InvITs are in discussions with investors, including the International Finance Corporation, which has previously invested in debt issued by several InvITs, including Cube Highways, according to a termsheet from an earlier last tapped the bond market in January, while Cube Highways raised funds through bonds in firms and pension funds participated in NHIT's previous bond offering, and the sources said they expect mutual funds to show interest this time, given that the tenor aligns with their investment horizon.($1 = 86.3825 Indian rupees)
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Business Standard
5 days ago
- Business
- Business Standard
Acquisitions by mature trusts to lift InvIT AUM to ₹8 trillion: Crisil
Assets under management (AUM) of infrastructure investment trusts (InvITs) are expected to cross Rs 8 trillion by fiscal 2027 (FY27), up from Rs 6.3 trillion in FY25, primarily driven by the acquisition of assets by mature trusts, according to Crisil Ratings. Mature trusts are those that have an operating track record of more than 1.5 years as of March 31, 2025. Although the growth in AUM will be accompanied by an increase in leverage levels, the credit profiles of InvITs are expected to remain stable, supported by the good quality of assets, adequate cash flows, and the structural benefits of cash flow pooling and regulatory guardrails. Asset addition is a key growth driver for InvITs, considering the finite life of infrastructure assets. The AUM addition is expected to be around Rs 1.7-1.8 trillion over FY26 and FY27, marginally lower than the Rs 2 trillion added in FY24 and FY25. The roads sector is likely to account for 80 per cent of the incremental AUM, as in the past two fiscals. While sectors such as renewable energy, transmission, and warehousing will contribute to the incremental AUM, their share could be low due to high upfront leverage of assets that require significant deleveraging under InvITs, sufficient access to capital outside InvIT platforms, and limited availability of operational assets. Manish Gupta, deputy chief ratings officer at Crisil Ratings, said, 'Mature trusts acquiring assets are expected to form 80-85 per cent of the incremental AUM over two fiscals, compared with approximately 65 per cent in the past two fiscals. Further, acquisitions typically increase leverage because the assets acquired generally have a higher proportion of debt. With most InvITs attaining operational stability now, they are ripe for growth. Hence, overall leverage is expected to inch up to 50 per cent by fiscal 2027.' Even as leverage is likely to increase, credit profiles are expected to remain stable, supported by predictable cash flows, long asset life, and a diverse pool of assets. At present, some trusts are opting for back-ended debt repayments supported by the long life of assets. While this helps InvITs optimise distributions, gradual amortisation of debt remains important over the medium term, considering the finite life of assets, Crisil noted. 'While growth and credit outlook remain stable, prudent capital structure management will remain monitorable as InvITs scale up in terms of size, debt levels, and complexity,' the ratings firm added.
News18
5 days ago
- Business
- News18
What You Need To Know About REITs And InvITs
Last Updated: Both REITs and InvITs are pivotal investment avenues in India and offer a chance to get exposure to real estate and infrastructural investment. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have emerged as critical real estate investment avenues in India. As the country focuses on real estate development and modernising infrastructure, the trusts give investors a structured programme to understand and evaluate information about these sectors. Companies that own, operate, or finance income-producing real estate across a range of property sectors fall under REITs, whereas similar investment vehicles focused on infrastructure projects are called InvITs. Through Real Estate Investment Trusts, investors can earn a share of the income generated through ownership of commercial real estate. Investors don't have to directly buy, manage or finance any properties under REITs. The trusts were introduced in India in 2014. The REITs have gained prominence among investors who want exposure to the real estate sector. Similarly, InvITs help drive investment in a diverse set of infrastructural assets, focusing on toll roads, power plants and pipelines. Introduced in 2016, InvITs attract long-term capital for infrastructural growth in the country. Both REITs and InvITs represent a transformative approach to real estate and infrastructural investment, offering an array of benefits to investors. However, there are certain key distinctions that an investor must consider before going ahead with either of them. Structure: Both REITs and InvITs pool investor funds and have a designated trustee, sponsor and manager, but their priorities differ from each other. Under REITs, the focus is on completed and income-generating real estate, while InvITs invest in roads, power plants and other infrastructural projects. REITs require at least 80 per cent of their assets to be in completed properties and a maximum of 20 per cent in under-construction projects or related securities. Under InvITs, it is mandatory to have 80 per cent of the investment in completed, revenue-generating infrastructure assets. Risk: As REITs offer a diversified portfolio in the real estate world, they come with significantly less risk on investment than InvITs, where infrastructural projects may be disrupted by operational and regulatory challenges. Minimum Investment: Earlier, the minimum subscription amount required for REITs stood at Rs 50,000 and Rs 1,00,000 for InvITs. This threshold has now been lowered to benefit investors, who can now subscribe to both options for Rs 10,000-15,000. view comments First Published: July 24, 2025, 17:34 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
News18
6 days ago
- Business
- News18
SEBI May Reclassify REITs And InvITs As Equity From Hybrid: Report
Last Updated: REITs and InvITs may be classified as equity if Sebi accepts the Finance Ministry's proposal, boosting their visibility in mutual funds' equity schemes. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) would soon be classified as 'equity" if the market regulator Sebi accepts the Finance Ministry's proposal in the upcoming board meeting, likely in the next two months, as per MoneyControl report. The move is set to increase the visibility and acceptability of these two instruments, giving mutual funds the option to include in their equtiy-oriented schemes, the MoneyControl report added. Currently, these two instruments are classified as hybrid. REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) are investment vehicles that allow individuals to invest in real estate and infrastructure assets, respectively, without owning them directly. REITs invest in income-generating properties like office buildings and malls, earning rental income, which is distributed to investors as dividends. InvITs, on the other hand, invest in infrastructure projects such as highways, power transmission lines, and pipelines, generating income through tolls or usage charges, which is shared with investors as interest or dividends. A hybrid fund unlike equity-oriented scheme adds different asset class in a single portfolio such as equity and debt (Bond/fixed-income securities), or gold or real estate. These instruments are listed and traded on stock exchanges like equity shares but have a unique feature—they are required to distribute a large portion (typically 90%) of their net distributable cash flow to unitholders, providing a stable income stream similar to debt instruments. Despite their benefits, officials note to MoneyControl that mutual fund exposure to REITs and InvITs remains below 1%, a figure they believe should rise given the potential of these instruments to deliver steady returns and support investments in the real estate and infrastructure sectors. view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
