InvITs, REITs Log 14-Fold Jump In Fund Raising At Rs 17,116 Crore In FY24

Industry experts noted that the outlook for the infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) for the FY25 remained very optimistic in terms of fundraising

While a REIT represents a portfolio including commercial real estate assets, out of which the majority are leased out, the InvIT comprises a portfolio of infrastructure assets such as highways.

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InvITs and REITs clocked an increase in interest from investors in 2023-24, as the fundraising through these instruments touched Rs 17,116 crore in FY24, data compiled by Prime Database.com revealed. This marked a jump of 14-fold on a year-on-year (YoY) basis, driven by stable returns, against Rs 1,166 crore raised in 2022-23 fiscal year.

Industry experts noted that the outlook for the infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) for the 2024-25 fiscal year remained very optimistic in terms of fundraising, reported PTI. 

Aryaman Vir, WiseX CEO, said, “After Sebi's amendments to the SM (small and medium) REITs regulations last month, we are poised for a transformative shift. The Indian fractional ownership market, set to evolve into SM REITs, is projected to grow from $500 million to over $5 billion in AUM by 2030, indicating a significant expansion and bright prospects for SM REITs.”

Vir added that the road sector is expected to benefit majorly and bring in about 75 per cent of the new inflows, attributed to a strong pipeline of assets geared up for monetisation and a strong momentum of infrastructure development. 

The last fiscal also clocked the maiden offer-for-sale (OFS) by an InvIT, as Data Infrastructure Trust raised Rs 2,071 crore. “The impressive growth in funds raised through the route could be attributed to several factors like regulatory support, a focused approach on infrastructure development and the growing popularity of fractional ownership in real estate,” Vir noted. 

While a REIT represents a portfolio including commercial real estate assets, out of which the majority are leased out, the InvIT comprises a portfolio of infrastructure assets such as highways.

Harsh Shah, CEO, IndiGrid, added, “Since the introduction of investment trusts in the Indian markets, REITs and InvITs have invested tremendous time and effort in educating the investor community of this new investment avenue and the benefits investment trusts provide to both investors via assured returns and visibility of cash flows and infrastructure developers by freeing up their capital to undertake further development.”