Transforming Investments: Making Infrastructure and Real Estate as Accessible as Equities

Indian investors are now accessing infrastructure and real estate through innovative financial instruments like AIFs, InvITs, and REITs, making these asset classes as investible as equities.

Real EstateInfrastructureAifsInvitsReitsReal EstateOct 09, 2025

Transforming Investments: Making Infrastructure and Real Estate as Accessible as Equities

Real Estate:For years, Indian investors focused mainly on Gold and Real Estate. In the last couple of decades, exposure to stocks and mutual funds has been increasing. There were limited opportunities to invest directly in infrastructure and Real Estate. But today, a new wave is changing the game for infrastructure and real estate, making them as accessible and investible as equities. This opportunity is not just financial innovation but a structural leap toward inclusive and sustainable investing, where every Indian investor, from a young professional to a pension fund, can participate in building the physical backbone of the country.

The Rise of Real Assets as an Investible Class

‘Investible’ means you can put your money into something and expect returns, like buying shares of a company. Until recently, infrastructure like roads, power plants, transmission lines, warehouses, and real estate like commercial buildings and malls were out of reach for most Indian investors due to large capital requirements and deep expertise required. However, global institutions and investors have been investing in Real Assets globally and in India over many decades.

That changed with the advent of AIFs (Alternative Investment Funds), InvITs (Infrastructure Investment Trusts), and REITs (Real Estate Investment Trusts). Now, these sectors are open to Indian investors. AIFs, particularly those focused on infrastructure, real estate, and yield assets, offer investors the flexibility of participating in private-market opportunities not available through listed instruments. InvITs allow investors to earn income from operational infrastructure assets such as toll roads, annuity roads, transmission grids, renewable energy, warehousing, telecom towers, etc. REITs provide exposure to income-generating real estate like office spaces, malls, and industrial parks, earning returns through rent and capital appreciation.

All three are regulated, professionally managed, and yield-oriented, enabling investors to access stable, inflation-hedged returns once limited to large institutions.

Why This Matters: From Physical to Financial Assets

This movement represents India’s asset financialization, the conversion of physical, cash-generating assets into liquid investment opportunities. For investors, this delivers:

- Stable, predictable cash flows from long-term contracts, rents, and tariffs.
- Inflation-hedged, real returns, uncorrelated to short-term equity market volatility.
- Diversification across infrastructure, real estate, and private yield assets.
- Access and inclusivity, allowing retail and institutional investors alike to participate with modest investments.

For the nation, this democratization channels domestic savings into productive, growth-driving assets, funding India’s roads, power grids, renewable energy, logistics parks, and commercial infrastructure.

Growth and Scale of InvIT & REITs Market

Over the past few years, India has seen a remarkable rise in the popularity and scale of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts). As of FY25, the combined Assets Under Management (AUM) of these instruments has reached USD 93.9 billion, more than doubling from USD 42.1 billion in FY20. This growth reflects increasing investor confidence and the maturity of these asset classes.

InvITs alone account for a significant portion of this, with an AUM of USD 73 billion in FY25. Looking ahead, the InvIT market is projected to grow substantially, with estimates suggesting it could reach USD 258 billion by 2030. This signals a strong future for infrastructure investment through capital markets. Currently, India has 5 listed REITs and 26 listed InvITs, offering investors a range of options to participate in income-generating assets. Together, these trusts have a combined market capitalization of USD 33.2 billion, making them a substantial part of India’s financial ecosystem.

AIFs: The Bridge Between Private and Public Markets

AIFs complement REITs and InvITs by offering customized structures that can fund early-stage projects, aggregate assets to developers, or acquire pre-operational assets before they mature into listed trusts. They play a crucial bridge role by channeling private capital into infrastructure and real estate well before those assets are ready for public-market. This ensures a continuous capital flow across the life cycle of real assets from creation to monetization. AIFs, too, have seen unprecedented growth with the total AUM crossing INR 10 lakh crore (USD 120 billion), reflecting a broad investor shift towards alternatives and yield-driven assets.

As regulatory clarity deepens and performance histories lengthen, AIFs, InvITs, and REITs will collectively form a seamless ecosystem of real-asset investing, much like equities and mutual funds do today.

Choosing the Right Platform: The Role of Asset Managers

While the opportunity is large, the quality of the platform managing these assets determines long-term success. Investors should evaluate on:

- Track record and governance of the asset manager
- Transparency and disclosure in operations and reporting
- Technology adoption in monitoring and asset optimization
- ESG integration and sustainability performance
- Growth pipeline—visibility on future acquisitions that can expand the trust or fund’s AUM

The best managers today combine infrastructure operations expertise with institutional-grade risk management and transparency, ensuring investors participate not just in returns, but in responsible nation-building.

India’s Next Leap: Financializing Growth

With government infrastructure spending having risen from USD 12 billion in FY15 to USD 75 billion in FY25, the demand for capital will only multiply. Public resources alone cannot meet this scale. The next phase of India’s growth must therefore be capital-market led, where citizens, institutions, and global investors co-own India’s growth story through investible infrastructure and real estate assets.

Every toll road, solar park, warehouse, and office tower is now a potential investment instrument, not just a physical structure. The convergence of AIFs, InvITs, and REITs is reshaping how wealth is created, risks are managed, and infrastructure is financed. This is not merely a shift in portfolio composition but a mindset transformation. The future of investing lies not in abstraction, but in ownership of the very assets that power India’s roads, cities, and industries.

Infrastructure and real estate are no longer distant, illiquid domains, they are now as investible as equities. For investors and for India alike, that is the next great leap.

Frequently Asked Questions

What are AIFs, InvITs, and REITs?

AIFs (Alternative Investment Funds), InvITs (Infrastructure Investment Trusts), and REITs (Real Estate Investment Trusts) are financial instruments that allow investors to invest in infrastructure and real estate. AIFs offer private-market opportunities, InvITs provide income from operational infrastructure, and REITs give exposure to income-generating real estate.

Why are these financial instruments important for Indian investors?

These instruments make infrastructure and real estate as accessible and investible as equities, offering stable, predictable cash flows, inflation-hedged returns, and diversification across asset classes. They also allow retail and institutional investors to participate in nation-building.

What is the current market size of InvITs and REITs in India?

As of FY25, the combined Assets Under Management (AUM) of InvITs and REITs in India has reached USD 93.9 billion, with InvITs alone accounting for USD 73 billion. The market is projected to grow significantly in the coming years.

How do AIFs complement InvITs and REITs?

AIFs provide customized structures to fund early-stage projects, aggregate assets, or acquire pre-operational assets before they mature into listed trusts. They ensure a continuous capital flow across the life cycle of real assets from creation to monetization.

What should investors consider when choosing an asset manager for these investments?

Investors should evaluate the track record and governance of the asset manager, transparency and disclosure in operations, technology adoption, ESG integration, and the growth pipeline for future acquisitions.