India’s Infrastructure Investment Trusts (InvITs) are set for robust growth, with Assets Under Management (AUM) projected to surpass ₹8 lakh crore by FY27, up from ~₹6.3 lakh crore in FY25. This 27% growth will be largely powered by mature InvITs acquiring new assets, especially in the roads sector.
Despite this growth being accompanied by higher leverage levels, Crisil Ratings expects the credit profiles of InvITs to remain stable, thanks to structural safeguards, high-quality assets, and predictable cash flows.
According to Crisil’s analysis, asset acquisition remains central to InvIT expansion, considering the finite life and yield constraints of infrastructure assets. Nearly ₹1.7–1.8 lakh crore worth of new assets are expected to be added by FY27, slightly lower than the ₹2 lakh crore added in the last two years.
Roads to Dominate, Renewables and Warehousing Lag
The road sector is expected to contribute approximately 80% of the incremental AUM, consistent with past trends. While renewables, power transmission, and warehousing will add to the portfolio, their contribution is expected to remain modest. This is due to high leverage of underlying assets, strong off-platform capital access, or limited availability of mature operational assets.
“Mature trusts acquiring assets are expected to form 80–85% of the incremental AUM over two fiscals, up from ~65% in the previous period,” said Manish Gupta, Deputy Chief Ratings Officer, Crisil Ratings.
“Acquisitions generally bring in higher debt, pushing up the leverage of InvITs.”
For instance, InvITs with a 2–5 year operating track record have seen leverage rise from 43% in FY23 to 47% in FY25, and this is expected to rise to ~50% by FY27.
Stable Credit Profiles Despite Rising Debt
Rising debt levels are being counterbalanced by the strong, predictable cash flows from long-life assets. In fact, credit stability is further anchored by asset diversification and low-risk additions, such as hybrid annuity model (HAM) roads and transmission lines, which allow InvITs to carry higher leverage without deteriorating credit quality.
“Even though DSCR has slightly contracted to ~1.7x from ~1.8x in FY23 due to increased leverage, it remains healthy,” noted Anand Kulkarni, Director, Crisil Ratings.
“Regulatory checks such as the need for six consecutive distributions before raising leverage beyond 49%, and caps on under-construction assets, help maintain balance.”
Back-ended Repayments & Regulatory Guardrails
Many InvITs are opting for back-ended debt repayment structures, capitalising on the long life of infrastructure assets to optimise distributions. However, experts caution that gradual amortisation of debt remains vital to manage credit risk effectively over time.
As InvITs grow in scale, complexity, and debt exposure, capital structure management will remain a key focus, even as the sector outlook remains stable.
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