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Investments in renewables, roads & realty to hit ₹17.5 tn in 2 yrs: Crisil

Investments in India's renewable energy, roads, and real estate sectors are estimated to touch ₹17.5 trillion over FY26 and FY27, up from ₹13.3 trillion in FY24 and FY25, according to Crisil. Accelerated adoption of storage-linked capacities in the renewable energy sector, a sharper focus on monetisation in roads, premiumisation in residential real estate, and the influx of global capability centres (GCCs) in commercial real estate are the key drivers of this projected growth. 'What remains constant across these three sectors is strong investment growth. Over this fiscal and the next, investments may rise at 15 per cent annually, reaching ₹17.5 trillion compared with ₹13.3 trillion in the preceding two fiscals,' said Krishnan Sitaraman, chief ratings officer, Crisil Ratings. 'While adapting to the new business dynamics will pose some challenges, credit profiles of Crisil-rated developers and projects would remain resilient.' In renewable energy, the shift towards hybrid or storage-backed capacities is gathering pace. Of the 75 GW capacity expected to be added in FY26 and FY27, hybrids will account for 37 per cent—a sharp rise from 14 per cent in FY24 and FY25. In the roads sector, which has a significant multiplier effect on the economy, a pick-up in project awarding is critical to revitalising growth. For the National Highways Authority of India (NHAI) to return to its peak execution rate of 6,000 km per year, a substantial increase in private capital through accelerated asset monetisation will be essential. Crisil expects the share of monetisation in NHAI's funding to grow to 18 per cent in FY26 and FY27, up from 14 per cent in FY24 and FY25. The monetisable asset base is currently estimated at ₹3.5–4 trillion. In residential real estate, demand is stabilising after the rapid post-pandemic recovery. Developer revenue growth is expected to remain steady at 10–12 per cent in FY26–FY27. While volume growth may rationalise, realisations will continue to be supported by demand for premium projects. Commercial real estate is also set to see steady net leasing growth of 7–9 per cent in FY26–FY27. With India continuing to remain a cost-efficient destination for GCCs, and with domestic sectors growing steadily, annual net leasing demand is expected to exceed 50 million sq ft by FY27. As these sectors transition to a new normal, they face evolving challenges. In renewables, timely availability of evacuation infrastructure is critical. Since renewable capacities typically take much less time to set up, temporary transmission bottlenecks could emerge. In roads, monetisation has been uneven, with around 35 per cent of toll-operate-transfer bundles floated in the past not receiving bids. Delays in approvals or mismatches in valuation could further slow sectoral growth. In residential real estate, new launches outpacing demand could push up inventory. Inventory levels are expected to rise to 2.9–3.1 years in FY26 from a low of 2.7 years in FY24, which could increase debt levels for some developers. For all three sectors, geopolitical risks and their impact on capital flows into India will bear watching. While such risks may pose challenges, Crisil expects credit risk profiles to remain resilient across renewables, roads, and real estate.