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regular-article-logo Tuesday, 23 July 2024

Infrastructure and realty to get Rs 15 lakh crore in investments till March 2026: Crisil Ratings

Investments in the energy sector will be focused on adding more green power in the country's energy mix, while road investments will be focused on creating denser networks and realty investments will be on residential as well as commercial projects, as per research

PTI Mumbai Published 18.06.24, 05:29 PM
Representational image.

Representational image. File picture.

Infrastructure and realty sectors are likely to get Rs 15 lakh crore worth of investments till March 2026, a domestic rating agency said on Tuesday.

The investments will create 50 GW of renewable energy capacity and 25,000 kms of roads in the infra space, and real estate, the rating agency said.

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"Investments in India's key infrastructure sectors -- renewable energy and roads -- and real estate are expected to grow 38 per cent in fiscal 2025 and 2026 compared with the previous two fiscals to Rs 15 lakh crore," Crisil Ratings said in a research note.

Investments in the energy sector will be focused on adding more green power in the country's energy mix, while road investments will be focused on creating denser networks and realty investments will be on residential as well as commercial projects, it said.

"The underlying demand drivers in these three sectors remain strong, with regular policy interventions fuelling investor interest," chief rating officer Krishnan Sitaraman said.

The government's targets on renewable energy have led to more auctions of projects and created a strong pipeline for players, it said, pointing out that FY24 saw auctions of 35 GW and the pipeline now stands at 75 GW.

On the roads front, the agency expects 12,500 kms of road building per year over the next two fiscal years because of the need for improved physical connectivity for broader economic growth.

In the real estate industry, the net leasing of commercial office space will see demand growth of 8-10 per cent this fiscal and the next, the agency said, attributing it to global capability centres eyeing India's large talent pool and competitive rentals, and also demand from domestic sectors.

Demand growth for residential real estate will sustain at 8-12 per cent this fiscal and the next, aided by favourable affordability and premiumisation, it said.

Policy will be playing an enabling role in the infrastructure and real estate creation, it said, listing down sectoral priorities.

For renewables, higher import duties have helped the domestic ecosystem for module production, it said, adding production-linked incentive schemes for battery and solar cells sets a more sustainable growth path.

In the case of the road sector, private sector confidence has been boosted through the hybrid annuity model (HAM) and improvement in concession agreements, with more-equitable risk sharing between developers and concessionaires, the agency said.

The agency said having a regulatory setup in the real estate sector and recent amendments in the Special Economic Zones (SEZ) Act have helped.

"Cumulatively Rs 2 lakh crore of equity capital has been deployed in these sectors over the past two fiscals driven by strong investor participation," its deputy chief ratings officer Manish Gupta said.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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