Acquisitions by mature trusts to lift InvIT AUM to ₹8 trillion: Crisil

Crisil expects InvIT AUM to surpass Rs 8 trillion by FY27, driven primarily by acquisitions by mature trusts, with a stable credit outlook despite higher leverage levels

Assets under management (AUM) of infrastructure investment trusts (InvITs) are expected to cross Rs 8 trillion by fiscal 2027 (FY27), up from Rs 6.3 trillion in FY25, primarily driven by the acquisition of assets by mature trusts, according to Crisil Ratings.

 

Mature trusts are those that have an operating track record of more than 1.5 years as of March 31, 2025.

 

Although the growth in AUM will be accompanied by an increase in leverage levels, the credit profiles of InvITs are expected to remain stable, supported by the good quality of assets, adequate cash flows, and the structural benefits of cash flow pooling and regulatory guardrails.

 

Asset addition is a key growth driver for InvITs, considering the finite life of infrastructure assets. The AUM addition is expected to be around Rs 1.7-1.8 trillion over FY26 and FY27, marginally lower than the Rs 2 trillion added in FY24 and FY25.

 

The roads sector is likely to account for 80 per cent of the incremental AUM, as in the past two fiscals. While sectors such as renewable energy, transmission, and warehousing will contribute to the incremental AUM, their share could be low due to high upfront leverage of assets that require significant deleveraging under InvITs, sufficient access to capital outside InvIT platforms, and limited availability of operational assets. 

 

Manish Gupta, deputy chief ratings officer at Crisil Ratings, said, “Mature trusts acquiring assets are expected to form 80-85 per cent of the incremental AUM over two fiscals, compared with approximately 65 per cent in the past two fiscals. Further, acquisitions typically increase leverage because the assets acquired generally have a higher proportion of debt. With most InvITs attaining operational stability now, they are ripe for growth. Hence, overall leverage is expected to inch up to 50 per cent by fiscal 2027.”

 

Even as leverage is likely to increase, credit profiles are expected to remain stable, supported by predictable cash flows, long asset life, and a diverse pool of assets.

 

At present, some trusts are opting for back-ended debt repayments supported by the long life of assets. While this helps InvITs optimise distributions, gradual amortisation of debt remains important over the medium term, considering the finite life of assets, Crisil noted.

 

“While growth and credit outlook remain stable, prudent capital structure management will remain monitorable as InvITs scale up in terms of size, debt levels, and complexity,” the ratings firm added.