Research Report

Building on the strong growth achieved over the past decade, ICRA expects the combined AUM of InvITs and REITs to double from ~Rs. 10 trillion in FY2026 to ~Rs. 20 trillion by FY2031, reflecting a CAGR of ~15%. Growth will be supported by infrastructure monetisation, sponsor-led asset recycling, expansion into new asset classes, increasing REIT penetration in commercial real estate and rising participation from domestic institutional investors.

• The regulatory framework for InvITs and REITs has undergone significant transformation over the past decade, with SEBI and RBI reforms enhancing investor participation, funding flexibility and market depth. Recent measures, including the reclassification of REITs as equity for mutual fund investments (January 2026) and the introduction of bank lending at the REIT level (effective October 2026), are expected to accelerate capital inflows, diversify funding sources and strengthen refinancing flexibility through longer-tenure debt.

Exhibit: Historical proportion of AUM of various sector in the InvIT space

Source: ICRA Research

• Road assets account for 43% of InvIT AUM as of March 2026, up from 16% five years ago, reflecting strong monetisation activity, even as telecom remains the largest segment at a marginally higher 44% of AUM.

• Office assets continue to dominate REIT portfolios despite increasing diversification into retail and warehousing.