|
India's Infrastructure Investment Trusts have emerged as the dominant vehicle for highway asset monetisation, with road InvIT assets under management projected to more than double in five years -- from Rs 2.46 lakh crore to Rs 5.45 lakh crore by fiscal 2030, according to a knowledge report released jointly by the Federation of Indian Chambers of Commerce and Industry and Crisil Intelligence at FICCI's Infrastructure Conclave 2026.
The report, titled Paving the Road Ahead: InvITs as Engines of Long-Term Value Creation, arrives as the government launches the National Monetisation Pipeline 2.0 -- a substantially more ambitious successor to NMP 1.0, which mobilised Rs 5.3 lakh crore between fiscal 2022 and fiscal 2025, achieving 89 per cent of its aggregate target. According to the report, "NMP 2.0 targets Rs 16.7 lakh crore across 12 infrastructure sectors through fiscal 2030, with highways serving as the undisputed anchor at Rs 4.14 lakh crore -- the single largest sectoral allocation in the pipeline. Of this, Rs 3.35 lakh crore is earmarked specifically for monetisation through InvIT and TOT structures, corresponding to 19,200 km of road assets." The scale of ambition is matched by demonstrated market momentum. Cumulative funds mobilised through InvITs across all sectors grew at a 65 per cent CAGR from Rs 0.11 lakh crore in fiscal 2020 to Rs 1.38 lakh crore in fiscal 2025. "Within this universe, road InvITs have been the fastest-growing segment, with AUM expanding at a 42 per cent CAGR from Rs 0.60 lakh crore in fiscal 2021 to Rs 2.46 lakh crore in fiscal 2025 -- rising from 18.5 per cent to 39 per cent of total InvIT AUM over the same period," the report highlighted. The fiscal case is equally compelling: asset monetisation enabled NHAI to facilitate Rs 72,000 crore of debt repayment between fiscals 2023 and 2025, supported by Rs 1.4 lakh crore monetised since 2020. Yet the report identifies a structural gap that defines both the challenge and the opportunity ahead. Only approximately 15,700 km of India's 3.25 lakh km network of national and state highways has been brought under InvIT structures -- a penetration level of just 4.8 per cent. With Vision 2047 targeting an expansion of the national highway network to over 2 lakh km, the pipeline of monetisable assets is set to grow substantially, making the current low penetration a significant indicator of future capital mobilisation potential. S Paramasivan, Chair of the FICCI Committee on Roads and Highways and Managing Director of Afcons Infrastructure said, "Road InvITs have started playing a significant role in infrastructure financing -- they allow monetisation of operational infrastructure assets and recycling of capital into new projects, while giving institutional investors access to stable, long-term infrastructure returns," adding that India now had the engineering capability, institutional experience and policy commitment required to build world-class infrastructure. The report further documents a decisive policy shift away from one-off Toll-Operate-Transfer transactions toward InvIT platforms capable of continuous, portfolio-based capital recycling. Unlike TOT, which delivers a single upfront receipt and exits the asset, InvITs allow sponsors to monetise while retaining strategic participation, inject new assets over time and embed professional lifecycle management advantages reinforced by a pass-through tax structure that distributes income directly to unitholders without taxation at the trust level. Manoj Kumar Dubey, Chairman and Managing Director of Indian Railway Finance Corporation, framed the cost of capital as the defining variable in infrastructure development. "The most important raw material for any infrastructure project is the cheapest finance. If you have access to the cheapest, most efficient finance, everything can be built in a very smart way," he said. "We are trying to bring our cost of borrowing to less than the G-Sec rate, less than 8 per cent." Jagannarayan Padmanabhan, Senior Director and Global Head for Transport, Logistics and Mobility at Crisil Intelligence, pointed to the unique risk-return proposition of road InvITs for individual investors. "This is probably the only asset class that is AAA-rated across all InvITs -- and yet gives you a return of between 10 to 15 per cent. You don't get a debt instrument that is AAA-rated, giving you that kind of return," he said, adding that the NHAI's forthcoming public InvIT opened the door to retail participation in an asset class that had until now been largely institutional. (ANI)
|
