Infrastructure Investment Trusts (InvITs) in India: Mapping the Future

India’s infrastructure sector is undergoing a dramatic transformation, driven by a robust policy push, significant government spending, and the emergence of new financing models. Amongst these, Infrastructure Investment Trusts (InvITs) have rapidly gained popularity as a vehicle for mobilizing private capital, enhancing asset monetization, and bridging the country’s funding gap for long-term infrastructure development.

What Are InvITs?

InvITs are pooled investment vehicles introduced by the Securities and Exchange Board of India (SEBI) in 2014, designed to unlock capital and provide liquidity for infrastructure assets. Functionally similar to Real Estate Investment Trusts (REITs), InvITs enable both institutional and retail investors to invest in completed, revenue-generating infrastructure projects, such as toll roads, power transmission networks, and renewable energy installations. These assets are transferred from the developer to a special purpose vehicle (SPV), and units are listed on exchanges, allowing investors to benefit from dividends and interest generated by such assets.

Growth Trajectory and Market Size

Since IRB InvIT launched the first infrastructure trust in 2016, the market has expanded rapidly. By August 2025, India has 27 InvITs—17 of them listed—with a combined market capitalization of approximately USD 33.2 billion. For comparison, the current InvIT asset under management (AUM) stands at USD 73.3 billion—almost 3.5 times higher than that of REITs. InvIT assets have skyrocketed from USD 7.8 billion in FY 2019 to USD 73.3 billion in FY 2025, a near tenfold increase, underscoring their growing importance in the capital markets.

Sectoral Distribution and Investment Focus

InvITs in India are heavily concentrated in the roads and energy sectors, with 15 out of 27 InvITs focused on road toll assets. The appeal lies in the reliability and predictability of toll-generated revenue, supported by government policies like the National Monetisation Pipeline (NMP) and National Highways Authority of India (NHAI) initiatives. Between FY 2022–25, NHAI mobilized INR 436 billion (USD 5.01 billion) via InvITs alone.

The energy sector contains five InvITs with an AUM of USD 7.1 billion, covering transmission lines, solar power, and battery energy storage. Despite India’s massive renewable energy ambition—targeting 500 GW of capacity by 2030—InvIT penetration remains low, with only 2% of the country’s solar assets and 2.7% of transmission lines under InvIT management. The logistics sector is also nascent, with three InvITs and a USD 1 billion AUM spread across 39 million square feet of warehousing assets.

Returns, Liquidity, and Capital Flows

One of the major attractions for investors is InvITs’ high and stable yield performance, driven by steady cash flows, long-term contracts, and government support. Since their inception, listed InvITs have generated average annual returns of 16.5%, compared to 14.4% for REITs. InvITs have also mobilized USD 15.8 billion from the primary market since FY 2020, nearly six times the capital raised via REITs.

Untapped Potential and Future Outlook

While the growth has been impressive, InvITs still represent a fraction of India’s infrastructure landscape. For instance, InvIT-managed road assets account for only 21% of NHAI toll plazas, and their share in state highways, energy, airports, ports, and wind sectors is markedly low. Knight Frank estimates that by 2030, InvITs could access a market opportunity of USD 258 billion, a 3.5-fold increase from current AUM, fueled by both core infrastructure spending and successful asset monetization under NMP 2.0.

Sector	InvIT Penetration (2025)	Target for 2030
Roads	21% of toll plazas	200,000 km
Energy	2.7% transmission lines	532,326 km
Solar	2% of installed capacity	230 GW
Logistics	8.1% warehousing stock	--
Airports	0%	240
Ports	0%	--
Wind	0%	140 GW

Challenges and Strategies for Deepening InvIT Markets

Despite their promise, InvITs face several challenges:

• High promoter ownership limits liquidity and restricts secondary market activity.

• Low retail participation due to complex product structures and low awareness, although SEBI has reduced ticket size thresholds to improve access.

• Policy hurdles and the lack of standardized frameworks in certain sectors.

• Limited foreign investment, hampered by currency and taxation complexities.

InvITs are poised to become a cornerstone of infrastructure financing in India, offering stable returns and unprecedented capital mobilization opportunities. With supportive government policies, ambitious infrastructure targets, and untapped market potential, InvITs will play a vital role in fueling India’s economic growth and modernization over the next decade.