India's InvIT market to hit ₹21 lakh crore by 2030 - should you invest?

returns. On average, approximately 75% of distributions are taxable (primarily interest and dividends), while approximately 25% are non-taxable (mainly capital repayment).

India’s Infrastructure Investment Trusts (InvITs) are poised to triple in size to ₹21 lakh crore by 2030, driven by the country’s $4.5-trillion infrastructure build-out, rising institutional allocations, and supportive regulations, according to a new white paper from wealth advisory firm Client Associates (CA).

 

The report, InvITs in India: A Comprehensive Analysis 2025, highlights that InvITs — trust-based vehicles that own income-producing infrastructure assets — have already doubled their assets under management from $37 billion in FY20 to $73 billion (₹6.3 lakh crore) in FY25. Over the last five years, they have mobilised $15.8 billion, with roads, power transmission and logistics accounting for the bulk of investments.

 

 

Infrastructure Investment Trusts (InvITs) are investment vehicles that allow individuals to invest in income-generating infrastructure assets — such as highways, power transmission lines, renewable energy parks, telecom towers, and gas pipelines — similar to how REITs do for real estate.

 

How they work

 

• InvITs own and operate infrastructure assets
• They collect revenue (like tolls, power tariffs, or lease rentals)
• A large portion of cash flows is distributed to investors as income

 

Why investors like them

 

• Stable income: typically 7–9% post-tax yields
• Inflation-linked returns: revenues often indexed to inflation
• Diversification: low correlation with equity markets
• Listed on stock exchanges: can be bought like share

 

SEBI’s 2025 move to classify REITs as equity instruments while retaining InvITs as hybrid assets has reinforced their role as income-oriented alternatives for portfolios. InvITs today deliver pre-tax returns of 10–12% and post-tax yields of 7–9%, outperforming traditional debt instruments, though they remain vulnerable to short-term price swings.

 

“InvITs offer investors a distinct combination of predictable income, inflation protection and low correlation with equities,” the note says, adding that nearly 75% of investor payouts are taxable, making distribution mix and entry price key for returns. Nearly half of InvIT ownership today sits with sponsors, while retail holds just 7%, signalling both concentration risks and headroom for wider participation.

 

The report flags liquidity as a major constraint, noting that only six publicly listed InvITs are currently liquid enough for retail investors without special arrangements. Strong sponsor strength, prudent leverage and careful evaluation of concession contracts and asset quality are essential for investor protection, it adds.

 

As India accelerates its infrastructure programme — including roads, energy, and digital corridors — InvITs are emerging as a core financing channel for asset monetisation. “While the market is growing rapidly, investors must be selective,” CA cautions, urging disciplined allocation and longer investment horizons.

 

Client Associates, which manages $7 billion for over 1,100 high-net-worth families, called for continued regulatory support, deeper secondary markets and higher retail inclusion to improve liquidity and price discovery in the segment. 

CA's analysis positions InvITs within the alternative debt or Alt-Debt sleeve of a diversified portfolio. InvITs provide diversification benefits through low correlation with traditional asset Classes—a correlation coefficient of 0.42 with equity markets stems from infrastructure assets' utility-like characteristics and contracted revenue streams that are largely

independent of economic cycles. 

Their portfolio functions include:

 

• Income generation: Similar to fixed income but with higher yields, albeit with some unit price volatility

• Diversification: Reducing overall portfolio risk through low correlation with equities

• Inflation hedging: Infrastructure revenues are often linked to inflation indices, providing protection against rising prices

InvITs are best suited for:

• Income-focused individuals seeking stable, recurring income

• Conservative investors looking for alternatives with superior post-tax yields

compared to traditional debt instruments

• Diversification-oriented investors aiming to participate in India's infrastructure

growth story

• Investors with long time horizons with appetite to ride out price volatility 

CA emphasizes that while InvITs present opportunities to participate in India's infrastructure growth story, indiscriminate investment should be avoided. Entry valuation, liquidity considerations, and tax treatment of distributions are critical factors for achieving superior risk-adjusted returns.