Key infrastructure sectors, including renewable energy, roads, and real estate, are projected to see a 38% investment growth in fiscals 2025 and 2026, reaching Rs 15 lakh crore, according to a CRISIL Ratings report. This growth will be driven by India’s push for sustainable infrastructure, enhanced physical connectivity, and increased demand for residential and commercial real estate.

Krishnan Sitaraman, Senior Director and Chief Ratings Officer at CRISIL Ratings, emphasized strong demand drivers in these sectors, supported by regular policy interventions that have bolstered investor interest and improved the credit risk profiles of private players.

In the renewable energy sector, the transition to sustainable energy is a key growth driver. Government targets have spurred auctions, with a record 35 GW auctioned in fiscal 2024, leading to a robust pipeline of 75 GW. This will drive the implementation of 50 GW capacity over the next two fiscals.

For the roads sector, the need for better physical connectivity, which boosts economic efficiency, has maintained healthy awarding trends. Strengthened order books of road developers, about 2.5 times their revenue, will support an 11% growth in highway construction, targeting 12,500 km annually over the next two fiscals.

In real estate, commercial office space net leasing will grow by 8-10% due to demand from global capability centers and domestic sectors. Residential real estate demand will sustain at 8-12%, driven by affordability and premiumization.

Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL, highlighted that policy interventions have increased investor interest, enabling developers to unlock equity capital. Around Rs 2 lakh crore of equity capital has been deployed in these sectors over the past two fiscals, aided by vehicles like InvITs and REITs, improving the credit profiles of private players and their capacity to fund future growth.