New Delhi, Nov 5 – India’s infrastructure investment trust (InvIT) market is on track to grow to about ₹21 trillion by 2030, according to a new study from the asset‑management firm Client Associates (CA). The jump will be powered mainly by the country’s massive infrastructure spending needs and government initiatives such as the National Infrastructure Pipeline (NIP).
CA’s white paper says the country will need roughly $4.5 trillion in infrastructure investment by 2030. With more institutional money moving into alternative assets, InvITs are set to play a big role. They also offer companies a way to optimise capital while still giving investors regular income.
Over the past five years, India’s InvIT ecosystem has grown to 27 trusts with a total assets‑under‑management (AUM) of roughly ₹6.3 trillion (about $15.8 billion). The trusts have delivered solid performance, with pre‑tax returns of 10‑12 % and post‑tax returns of 7‑9 %, beating typical fixed‑income products.
CA highlighted that InvITs strike a good balance between risk and reward. Their volatility is about 10.2 % – lower than the 15.4 % seen in equities – while total returns sit near 12.2 %, just below the 12.3 % equity average. This makes InvITs a stable income source with a predictable cash‑flow profile.
The report also explains a recent Securities and Exchange Board of India (SEBI) move that reclassifies real‑estate investment trusts (REITs) as an equity asset for mutual funds, while keeping InvITs in the hybrid category. REITs behave more like equity and are highly liquid, whereas InvITs—mostly private placements—offer steadier cash flows and lower liquidity, making them debt‑hybrid rather than equity.
Government reforms are another driver. The NIP, asset monetisation programmes through bodies like NHAI, and 2024 tax changes that cut long‑term capital gains (LTCG) tax have all lifted the appeal of InvITs. As India pushes its infrastructure agenda, InvITs look set to become a key funding source for the next decade.
Source: ianslive
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