Infra, Energy, Real Estate Investments To Hit Rs 17.5 Tn
ECONOMY & POLICY

Infra, Energy, Real Estate Investments To Hit Rs 17.5 Tn

Investments in India’s renewable energy, roads, and real estate sectors are projected to reach Rs 17.5 trillion over the financial years 2026 and 2027, according to Crisil Ratings. This marks a 15 per cent annual increase over the previous two years, which saw investments totalling Rs 13.3 trillion.

Krishnan Sitaraman, Chief Ratings Officer at Crisil, stated that the investment momentum remains strong across all three sectors. In renewable energy, the country is shifting toward hybrid and storage-backed capacity to address the issue of intermittency. Of the 75 GW capacity expected to be added over FY26 and FY27, around 37 per cent will be from hybrid sources, a steep rise from the 14 per cent share in the previous two years.

In the roads sector, growth hinges on project awarding and asset monetisation. Crisil expects the National Highways Authority of India (NHAI) to return to its earlier peak of awarding 6,000 kilometres annually, supported by a projected increase in monetisation’s contribution to its funding—from 14 per cent in the previous two years to 18 per cent in FY26 and FY27. NHAI currently has a monetisable asset base worth Rs 3.5–4 trillion.

In real estate, demand for premium residential projects and the expansion of Global Capability Centres (GCCs) in commercial spaces are reshaping developer strategies. Residential demand is stabilising post-pandemic, and Crisil anticipates 10–12 per cent revenue growth in FY26 and FY27. Net leasing in commercial real estate is expected to grow 7–9 per cent annually, with annual demand forecast to exceed 50 million square feet by FY27.

Despite this outlook, sector-specific challenges persist. For renewables, Rs 1 trillion is being spent over two years to ramp up transmission infrastructure, but risks of delays due to land acquisition, permits, and equipment shortages remain.

Road sector monetisation has seen mixed results, with 35 per cent of toll-operate-transfer projects not awarded, often due to valuation gaps or approval delays.

In residential real estate, excess supply may push inventory levels to 2.9–3.1 years in FY26 from 2.7 years in FY24, potentially pressuring developer debt.

Geopolitical risks also loom, but Crisil expects credit risk profiles to remain stable across these sectors. Over the past two years, Rs 2.1 trillion in equity has been deployed, significantly strengthening balance sheets.

Manish Gupta, Deputy Chief Ratings Officer at Crisil, said infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) have further improved credit resilience through their structured frameworks and investor protections.

“Even if some downside risks materialise, robust cash flows and healthy balance sheets are expected to cushion the impact on credit profiles,” Crisil concluded.

Investments in India’s renewable energy, roads, and real estate sectors are projected to reach Rs 17.5 trillion over the financial years 2026 and 2027, according to Crisil Ratings. This marks a 15 per cent annual increase over the previous two years, which saw investments totalling Rs 13.3 trillion.Krishnan Sitaraman, Chief Ratings Officer at Crisil, stated that the investment momentum remains strong across all three sectors. In renewable energy, the country is shifting toward hybrid and storage-backed capacity to address the issue of intermittency. Of the 75 GW capacity expected to be added over FY26 and FY27, around 37 per cent will be from hybrid sources, a steep rise from the 14 per cent share in the previous two years.In the roads sector, growth hinges on project awarding and asset monetisation. Crisil expects the National Highways Authority of India (NHAI) to return to its earlier peak of awarding 6,000 kilometres annually, supported by a projected increase in monetisation’s contribution to its funding—from 14 per cent in the previous two years to 18 per cent in FY26 and FY27. NHAI currently has a monetisable asset base worth Rs 3.5–4 trillion.In real estate, demand for premium residential projects and the expansion of Global Capability Centres (GCCs) in commercial spaces are reshaping developer strategies. Residential demand is stabilising post-pandemic, and Crisil anticipates 10–12 per cent revenue growth in FY26 and FY27. Net leasing in commercial real estate is expected to grow 7–9 per cent annually, with annual demand forecast to exceed 50 million square feet by FY27.Despite this outlook, sector-specific challenges persist. For renewables, Rs 1 trillion is being spent over two years to ramp up transmission infrastructure, but risks of delays due to land acquisition, permits, and equipment shortages remain.Road sector monetisation has seen mixed results, with 35 per cent of toll-operate-transfer projects not awarded, often due to valuation gaps or approval delays.In residential real estate, excess supply may push inventory levels to 2.9–3.1 years in FY26 from 2.7 years in FY24, potentially pressuring developer debt.Geopolitical risks also loom, but Crisil expects credit risk profiles to remain stable across these sectors. Over the past two years, Rs 2.1 trillion in equity has been deployed, significantly strengthening balance sheets.Manish Gupta, Deputy Chief Ratings Officer at Crisil, said infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) have further improved credit resilience through their structured frameworks and investor protections.“Even if some downside risks materialise, robust cash flows and healthy balance sheets are expected to cushion the impact on credit profiles,” Crisil concluded.

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