Now Reading: REIT, InvIT market could unlock Rs 11.6 lakh crore by 2030
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REIT, InvIT market could unlock Rs 11.6 lakh crore by 2030
India's real estate investment trust (REIT) and infrastructure investment trust (InvIT) market could unlock up to Rs 11.6 lakh crore in fresh capital by 2030, according to a report. Mutual funds represent…
India's real estate investment trust (REIT) and infrastructure investment trust (InvIT) market could unlock up to Rs 11.6 lakh crore in fresh capital by 2030, according to a report. Mutual funds represent the biggest potential source of incremental demand at around Rs 4.5 lakh crore, followed by insurers at Rs 3.2 lakh crore and pension funds at Rs 2.2 lakh crore.
The report notes that domestic long-duration institutional investors currently use only about 7.5% of their available regulatory limits for REITs and InvITs. Full utilisation of these limits could redirect nearly Rs 7 lakh crore into the asset class, about 2.6 times the current free-float market capitalisation of Indian REITs and InvITs. Retail and high-net-worth investors could contribute another Rs 1.2 lakh crore.
Regulatory changes could unlock more capital. Allowing the Employees' Provident Fund Organisation greater access to non-public-sector-sponsored trusts could channel over Rs 60,000 crore through a 2% additional allocation. A 1% increase in insurance allocation could bring in more than Rs 60,000 crore. REIT and InvIT exchange-traded funds and global index inclusion could further broaden access.
Indian Opinion Analysis
The estimated Rs 11.6 lakh crore is more than four times the current market capitalisation of listed REITs and InvITs, which the Securities and Exchange Board of India opened to a wider retail investor base in 2024 through a lower minimum investment threshold. The key bottleneck is regulatory headroom: the Insurance Regulatory and Development Authority of India caps insurer exposure to these instruments at a percentage of assets under management, and the EPFO's investment mandate restricts non-PSU-sponsored trust exposure. The report assumes these limits will be relaxed. The concrete signal to watch is whether the Finance Ministry's next budget increases the EPFO's overseas and alternative investment ceilings or allows a higher allocation to private InvITs, which would directly unlock the Rs 60,000 crore mentioned in the report.
The concrete signal to watch is whether the Finance Ministry's next budget increases the EPFO's overseas and alternative investment ceilings or allows a higher allocation to private InvITs, which would directly unlock the Rs 60,000 crore mentioned in the report.
Source: businesstoday.in
This brief was synthesised by AI from the source linked above.
