The combined assets under management (AUM) of infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) are projected to double to Rs. 20 trillion by 2030-31. ICRA reports this growth from a base of Rs. 10 trillion in 2025-26, reflecting a compound annual growth rate (CAGR) of around 15%. This expansion is underpinned by the rapid growth observed between March 2021 and March 2026, where InvIT AUM surged to Rs. 7.0 trillion from Rs. 3.2 trillion, achieving a CAGR of 17%, while REIT AUM grew to Rs. 3.1 trillion from Rs. 0.7 trillion, with a CAGR of 33%.
This expansion is driven by several factors. Continued monetization of road and transmission assets, the scaling up of renewable energy and fibre platforms, and the growing presence of REITs in commercial real estate all contribute. Additionally, warehousing and data centres are emerging as new growth areas. Within InvITs, the roads segment has been particularly dynamic, with its share in AUM rising to 43% in March 2026 from 16% in March 2021, though telecom remains slightly ahead at 44%.
Strong Historical Performance
The projected growth builds upon a strong historical performance. Between 2020-21 and 2025-26, combined AUM grew from Rs. 4 trillion to Rs. 10 trillion. Anupama Reddy, Vice President and Group Head of Corporate Ratings at ICRA, highlights the maturity of the InvIT and REIT ecosystem. This maturity, she says, “can support meaningful growth across both traditional and emerging asset classes.” As of 2025-26, the industry comprised 25 InvITs and six publicly listed REITs, reflecting its growing scale and diversification.
ICRA forecasts InvIT AUM to reach Rs. 13.5 trillion and REIT AUM to reach Rs. 6.5 trillion by 2030-31. This growth is expected to be fueled by the monetization of infrastructure assets and the introduction of new asset classes, with office assets remaining central to REIT portfolios while gradually diversifying into retail and warehousing.
Regulatory Reforms and Investor Confidence
A decade of regulatory reforms has strengthened the foundation for future growth. These reforms have improved investor access, funding flexibility, and market depth. Recent measures include the reclassification of REITs as equity for mutual fund investment purposes in January 2026 and permission for banks to lend directly at the REIT level from October 1, 2026. These changes are expected to support larger capital allocations, diversify funding sources, and improve refinancing flexibility through access to longer-tenure debt.
Growing Investor Participation
Domestic capital is playing an increasingly significant role in the growth of InvITs and REITs. Mutual fund exposure to these assets increased by 56% year-on-year to Rs. 310 billion as of June 2026. Participation from insurers, pension funds, sovereign funds, and retail investors has also deepened, reflecting broader market acceptance.
This growing investor confidence is bolstered by healthy risk-adjusted returns. Seasoned issuances have recorded a median extended internal rate of return (XIRR) of around 14%. Additionally, borrowing spreads relative to G-Secs and AAA-rated corporate bonds have narrowed, further enhancing the attractiveness of these investments. The recent regulatory changes are expected to reinforce this trend by enabling wider participation and improving access to efficient, longer-tenure funding.
Capital Raising and Future Prospects
Capital-raising activity has strengthened significantly as the market matures. Since 2019-20, InvITs and REITs have collectively raised around Rs. 200 billion through various means, including public issues, private placements, preferential allotments, institutional placements, and rights issues, with InvITs accounting for nearly 80% of the total. Almost half of this amount was raised in the last three years, highlighting stronger issuer activity and growing investor acceptance.