India's InvIT Assets Set to Surge by Rs 1 Lakh Crore in FY26

The report from CareEdge Ratings said AUM of these trusts doubled from about Rs 3 lakh crore in FY22 to roughly Rs 6.25 lakh crore by FY25.

Combined leverage or total external debt to enterprise value is expected to remain at around 49 per cent in FY26, driven by higher valuations from equity raising and lower interest rates, the report further said.

The number of InvITs rose from 11 in FY22 to 22 in FY25, with AUM concentrated in telecom at about Rs 3.06 lakh crore and roads at Rs 2.46 lakh crore, which together account for nearly 90 per cent of industry AUM.

Portfolio expansion prospects are strong across roads, transmission, warehousing and renewables, and the medium-term trajectory will benefit from the National Monetisation Pipeline‑II the pool of operational HAM assets and increasing activity on transmission and warehousing platforms.

The investment opportunity in transmission is large, with planned investments of about Rs 4.86 lakh crore till 2030- 31, as per the Central Transmission Utility's Master Rolling Plan, creating a sustained pipeline of operational assets.

"The sector's credit profile remains robust, supported by diversified, operational asset pools. However, there remains significant potential to enhance creditor protections further and deepen the domestic investor base, particularly given the currently low participation by retail investors, mutual funds, and insurance companies," said Maulesh Desai, Director at CareEdge Ratings.

InvITs mobilised Rs 88,000 crore of equity during FY23-FY25 and are expected to raise Rs 16,500 in this fiscal year, the report further said. The bond market participation will likely remain moderate, with non‑convertible debentures forming about 20 per cent of estimated outstanding debt, the firm forecasted.

Further, the credit agency predicted the installed renewable capacity in India to increase to 460 GW by FY30, translating into a large pipeline of operational assets.

- IANS