Renewable Energy, Roads, and Real Estate Set to Attract Rs 17.5 Trillion in Investments

MUMBAI: The renewable energy, roads, and real estate sectors are witnessing a surge in investor interest, projected to see a 15% annual increase in investment inflows, reaching Rs 17.5 trillion over the next two fiscal years.

Renewable EnergyRoadsReal EstateInvestmentsCrisil RatingsReal Estate MumbaiJun 09, 2025

Renewable Energy, Roads, and Real Estate Set to Attract Rs 17.5 Trillion in Investments
Real Estate Mumbai:MUMBAI: The renewable energy, roads, and real estate sectors are witnessing a significant surge in investor interest, projected to see a 15% annual increase in investment inflows, reaching Rs 17.5 trillion over the next two fiscal years. This is a substantial jump from the Rs 13.3 trillion invested in these sectors over the preceding two fiscals.

In fact, these sectors are seeing varied trends. The renewable energy sector is witnessing accelerated adoption of storage-linked capacities, while the roads sector is focusing on monetisation. On the other hand, the real estate sector is experiencing premiumisation in residential properties and an influx of global capability centres in commercial real estate, driving a realignment of offerings by developers, according to a report by Crisil Ratings.

Krishan Sitaraman, the chief ratings officer at Crisil Ratings, stated, “What remains constant across these three sectors is the strong investment growth. Over this fiscal and the next, investments may rise 15% annually, reaching Rs 17.5 trillion compared to the Rs 13.3 trillion in the preceding two fiscals.”

In the renewable energy space, addressing the intermittency of power supply is a critical issue. There is a transition towards hybrid or storage-backed capacities, which facilitates the scheduling of power round-the-clock with greater confidence. Of the 75 gigawatts (gw) capacity to be added in this and the next fiscal, hybrids will account for 37% from 14% during the past two fiscals.

In the roads sector, which has a significant multiplier effect on the economy, a pick-up in project awarding will be crucial to revitalise sectoral growth. For the National Highways Authority of India (NHAI) to reach its previous highs of 6,000 km/year of awards and execution, a substantial rise in private capital through the acceleration of asset monetisation will be essential. We expect the share of monetisation in NHAI’s sources of funds to grow to 18% in this fiscal and the next from 14% in the preceding two fiscals. The NHAI has a monetisable asset base of Rs 3.5-4 trillion.

In the real estate segment, the residential market is seeing demand normalise after a rapid recovery following the pandemic. Revenue growth for developers is expected to remain steady at 10-12% this fiscal and the next. With volume growth slated to rationalise, realisations will be supported by continuing demand for premium projects.

Commercial real estate, too, will see steady net leasing growth of 7-9% this fiscal and the next. As the country continues to remain a cost-efficient market for global capability centres (GCCs) and the domestic sectors grow at a steady pace, annual net leasing demand is poised to cross 50 million square feet by fiscal 2027.

However, with growth also comes challenges. In the renewable energy sector, the timely availability of evacuation is critical. A significant ramp-up in transmission capacity is underway, with a total capital expenditure of Rs 1 trillion in this fiscal and the next, which is double that of the preceding two fiscals.

In the roads sector, monetisation has been a mixed bag in the past, with 35% of the total toll-operate-transfer bundles floated not being awarded. Possible delays in monetisation due to approvals or mismatches in valuations can lead to a slowdown in sectoral growth.

In residential real estate, new launches outpacing demand can ratchet up inventory levels. Inventory is expected to inch up to 2.9-3.1 years this fiscal after achieving a low of 2.7 years in fiscal 2024. This may increase the debt of some developers.

Frequently Asked Questions

What is the projected investment growth in the renewable energy, roads, and real estate sectors?

The sectors are projected to see a 15% annual increase in investment inflows, reaching Rs 17.5 trillion over the next two fiscal years.

What is the trend in the renewable energy sector?

There is a transition towards hybrid or storage-backed capacities to address the intermittency of power supply.

How important is project awarding in the roads sector?

A pick-up in project awarding is crucial to revitalise sectoral growth, and a substantial rise in private capital through asset monetisation will be essential.

What is the expected growth in the residential real estate market?

Revenue growth for developers is expected to remain steady at 10-12% this fiscal and the next, supported by demand for premium projects.

What are the challenges in the renewable energy sector?

The timely availability of evacuation is critical, and a significant ramp-up in transmission capacity is underway.

Related News Articles

Birla Estates Unveils Luxury Housing Project in Gurugram Worth INR 5,000 Crore
Real Estate

Birla Estates Unveils Luxury Housing Project in Gurugram Worth INR 5,000 Crore

Birla Estates has announced a new luxury housing project in Gurugram, in partnership with Barmalt India Pvt Ltd, with a development potential of approximately 2.4 million square feet and an estimated revenue of INR 5,000 crore.

June 17, 2024
Read Article
NAREDCO Maharashtra to Host India's Biggest Real Estate Property Expo, HOMETHON 2024
Real Estate Maharashtra

NAREDCO Maharashtra to Host India's Biggest Real Estate Property Expo, HOMETHON 2024

Mumbai (Maharashtra) [India], September 25: The National Real Estate Development Council (NAREDCO) Maharashtra is all set to present the third edition of the HOMETHON Property Expo 2024, India's largest real estate property expo.

September 25, 2024
Read Article
Mumbai Property Expo: A Golden Opportunity for Homebuyers
Real Estate Maharashtra

Mumbai Property Expo: A Golden Opportunity for Homebuyers

Naredco Maharashtra's 3-day property expo in Mumbai features over Rs 10,000 crore worth of inventory from builders across Maharashtra, offering discounts, freebies, and a wide range of options for homebuyers.

October 4, 2024
Read Article
Piramal Capital & Housing Finance Sells Mumbai Property for ₹187 Crore to Shoquba Realty
Real Estate Mumbai

Piramal Capital & Housing Finance Sells Mumbai Property for ₹187 Crore to Shoquba Realty

Piramal Capital & Housing Finance has sold its immovable property in Santacruz East, Mumbai, to Shoquba Realty for ₹187 crore. The company also raised $150 million through a global bond sale.

October 5, 2024
Read Article
Mahindra & Mahindra Launches Advanced EV Manufacturing Unit Near Pune
Real Estate Pune

Mahindra & Mahindra Launches Advanced EV Manufacturing Unit Near Pune

Mahindra & Mahindra has unveiled a state-of-the-art EV manufacturing and battery assembly unit at its Chakan plant near Pune, investing Rs 4,500 crore in the project.

January 8, 2025
Read Article
Homebuyer Receives Rs 2.26 Crore Compensation for 10-Year Delay in Flat Possession
real estate news

Homebuyer Receives Rs 2.26 Crore Compensation for 10-Year Delay in Flat Possession

The Haryana Real Estate Regulatory Authority (RERA) has ruled that a builder must pay Rs 2.26 crore as compensation to a homebuyer for a 10-year delay in flat possession. This case highlights the importance of builder accountability and consumer protectio

January 23, 2025
Read Article