Mature, Mighty & Moving Fast: India’s InvITs Set Growth Tracks for FY27 and Beyond

India's Infrastructure Investment Trusts (InvITs) are poised for an asset boom, with Crisil Ratings expecting their assets under management (AUM) to grow from ₹6.3 lakh crore in FY25 to a staggering ₹8 lakh crore by FY27. Maturity InvITs are propelling the boom by investing actively in assets, especially in the roads space, while sustaining healthy credit quality even as leverage increases.

 

Key Highlights

 

Mature InvITs take the lead: InvITs with over 1.5 years of track record will add 80–85% of incremental AUM in FY27, up from about 65% over the past two years.

 

AUM Growth: To add ₹1.7–1.8 lakh crore over the next two years, primarily by way of acquisition. Total AUM to be over ₹8 lakh crore by FY27.

 

Dominating roads segment: Road assets will contribute nearly 80% of the new AUM, as mature trusts add to their portfolio toll and hybrid annuity model (HAM) roads.

 

Leverage edges higher: Leverage ratios overall are to rise and may reach 50% by FY27, as acquisitions are usually financed with more debt. But good credit profiles are underpinned by good cash flows and regulation guardrails.

 

Strong credit profile: In spite of a marginal reduction in Debt Service Coverage Ratio (now ~1.7x), credit quality of InvITs continues to be supported by quality assets, stable cash flows, and diversified investments.

 

Acquisition-led drivers: Large transactions, like massive debt-raising by KKR's Highways Infrastructure Trust, showcase the way fresh capital is driving InvIT expansion and asset consolidation in the space.

 

Source: Business Standard, Economic Times Infra, Equity Bulls