Over the past year, India’s infrastructure funding landscape has matured further, driven by robust policy and regulatory support. Infrastructure investment trusts (InvITs), real estate investment trusts (REITs) and infrastructure bonds continued to gain momentum, offering new avenues for investors. Equity funds flowed in from global pension funds and sovereign wealth funds. Non-banking financial companies continued to play a key role in financing, while multilateral development banks remained an active supporter of large-scale projects. Together, this dynamic funding strategy has steadily fuelled infrastructure growth.
Indian Infrastructure takes a look at some of the key developments in the infrastructure finance sector over the past year…
IPO moves
- Initial public offering (IPO) activity remained robust in 2024-25, with average issue sizes growing. Renewable energy companies accounted for a significant share of major IPOs.
- Notable issuances included NTPC Green Energy Limited raising Rs 100 billion, Afcons Infrastructure raising Rs 54.3 billion and Waaree Energies’ listing worth Rs 43.21 billion. Other major issuances include ACME Solar (Rs 29 billion), Premier Energies (Rs 28.30 billion) and Ather Energy (Rs 29.84 billion).
- Highway Infrastructure IPO was oversubscribed by 7.47 times. Retail individual investors fetched 9.63 times subscription, the quota for non-institutional investors was subscribed 7.14 times, and the qualified institutional buyers portion received 90 per cent subscription.
- InvITs and REITs played a significant role in boosting activity. Capital Infra Trust raised Rs 15.78 billion, while Knowledge Realty Trust raised Rs 48 billion in India’s largest REIT IPO.
- The newly introduced small and medium REIT category witnessed its first IPO with Property Share Investment Trust’s PropShare Platina IPO, which raised Rs 3.53 billion.
Growing InvITs/REITs momentum
- InvITs and REITs continued to see fast-paced growth, with the roads sector emerging as a standout performer. As of August 2025, the total assets under management of InvITs and REITs together exceeded Rs 9 trillion.
- Cumulatively, during the year, business trusts raised over Rs 310 billion.
- In the largest monetisation transaction, the National Highways Infra Trust raised Rs 183.8 billion. A key milestone was the Employees’ Provident Fund Organisation’s first-ever InvIT investment worth Rs 20.35 billion in the same round.
- TVS Infrastructure Trust and Roadstar Infra Investment Trust were listed via private placement.
Surge in bond issuances
- Commercial banks drove record-high issuances, raising around Rs 945 billion amid sluggish deposit growth and rising credit demand. Public sector banks accounted for 90 per cent of the total issuances.
- State Bank of India alone raised Rs 300 billion in three equal tranches via 15-year infrastructure bonds.
- Municipal bond issuances saw renewed activity. Greater Chennai Corporation and Pimpri Chinchwad Municipal Corporation (PCMC) raised Rs 2 billion, with PCMC’s bonds being oversubscribed 5.13 times.
Deal dynamics
- In 2024-25, the infrastructure sector attracted strong private equity (PE) and venture capital (VC) interest, alongside strategic mergers and acquisitions by companies, taking the total deal value to over Rs 3 trillion in more than 200 deals.
- The aviation sector saw consolidation with the Air India-Vistara and Air India Express-AIX Connect merger, while the construction materials sector witnessed major mergers, with Ambuja Cement Limited’s takeover of Penna and Orient Cement, and UltraTech Cement’s acquisition of India Cements and Star Cement, among others.
- Key asset sale deals included JSW Neo Energy’s acquisition of O2 Power for Rs 124.68 billion, Highways Infrastructure Trust’s purchase of toll, operate, transfer Bundle 16 for Rs 66.61 billion, and Cube Highways Trust’s acquisition of two road assets for Rs 41.85 billion.
- Logistics and clean mobility start-ups attracted steady PE and VC funding – Porter ($200 million), Instant XP ($35 million) and Kinetic Green ($25 million). Others like JBM Ecolife, Alt Mobility, AmpereHour, Celcius Logistics, and Oben Electric raised significant capital.
Increasing focus on green financing
- Green bonds, sustainability-linked bonds (SLBs), and environmental, social and governance (ESG) bonds gained strong traction during 2024-25.
- During the year, ESG issuances totalled Rs 87.43 billion across 27 deals, with many issues witnessing strong oversubscription. The renewable energy sector led the charge, with the key issuers including ReNew, Indian Renewable Energy Development Agency and Avaada.
- DME Development Limited, the National Highways Authority of India’s (NHAI) wholly owned subsidiary, raised Rs 7.75 billion through green bonds, marking NHAI’s first fundraise through this instrument. Meanwhile, REC Limited mobilised $500 million through green dollar bonds.
- Through SLBs, Vertis Infrastructure Trust raised Rs 9 billion, Cube Highways Trust raised Rs 8.6 billion and NDR InvIT raised Rs 6.3 billion. Additionally, Larsen & Toubro raised Rs 5 billion through India’s first ESG SLB bond listed on the exchange.
- In sustainability-linked loan activity, UltraTech Cement and Power Grid Corporation of India Limited secured $500 million and $200 million, respectively.
