Volatility in equity markets may have led to several initial public offers being pulled back but new issues by yield-generating real estate and infrastructure investment trusts continue to find takers on the back of steady cash flows and investor demand for predictable returns.
As the name suggests, real estate investment trusts, or REITs, are companies that own and run income-generating real estate assets, while infrastructure investment trusts, or InvITs, do the same with infrastructure projects. Both REITs and InvITs have steady, predictable income streams and the trusts distribute most cash flows to investors.
After the recent Bagmane REIT momentum, firms such as Cube Highways InvIT and Horizon Parks are moving closer to tapping public markets this year. Others such as Altius Telecom Infrastructure Trust are also preparing to join the queue with a ₹6,000 crore issue, according to a recent Bloomberg report.
Cube Highways Trust is targeting a mid-year listing for its ₹5,000 crore IPO, according to a person with direct knowledge of the development. Cube Highways did not respond to Mint’s queries till press time.
Blackstone-backed Horizon Industrial Parks Ltd, earlier this month, received observations from the markets regualtor for its proposed fresh issue of shares worth ₹2,600 crore.
This comes at a time that large equity listings have hit a roadblock with the meltdown in Indian equity markets; firms such as Flipkart and Phonepe have reportedly deferred their IPO plans. Many digital businesses continue to make losses despite operating in areas with large addressable markets.
“We are seeing an increasing number of REITs and InvITs tap the public markets. Additionally, the quantum and the frequency of fund raising has also increased including through follow on trades,” Kaushal Shah, managing director and head of equity capital markets at Kotak Investment Banking told Mint.
Returns outweigh equity IPOs
REIT and InvIT issuers have continued with listings despite volatility in equity markets.
“We would have lost 3-5 weeks with the West Asia crisis-led volatility but the time does not matter,” Asheesh Mohta, head of real estate in India at Blackstone, told Mint. “When assets have stable cash flows and strong tenant conversations and pipeline, investor interest comes back quickly.”
Over the past two-three months, at least three REIT and InvIT IPOs—including Bagmane REIT, Citius Transnet Investment Trust, and Raajmarg Infra Investment Trust—have moved ahead, while only one sizable IPO, OnEMI Technology Solutions, parent of digital lender Kissht, hit the market.
This marks a big change: the full 2025 year saw about four IPOs by REITs and InvITs like Knowledge Realty Trust versus over 365 new large equity issues.
Last month, Brookfield India Real Estate Trust (Brookfield India REIT) raised approximately ₹2,600 crore through an institutional placement of units, alongside securing a ₹1,125 crore investment from 360 ONE Asset in one of its key office assets in Bengaluru. Ahead of its IPO, in March, sponsor entities owned by I Squared Capital (Cube Mobility Investments and Cube Highways and Infrastructure III) sold a 2.7% stake worth ₹533.6 crore.
“Investors look at REITs and InvITs very differently from traditional equity IPOs,” Kotak's Shah said, adding that they do not expect pure equity-style returns from such instruments and instead evaluate them more like debt or hybrid products.
Investors in InvITs typically target internal rates of return of 12–14%, with annual cash yields of 8–9%, while REIT investors generally expect yields of 6–7%.
The return profile has held up well against equity markets. Large InvITs have delivered returns ranging between 13–22% over the past year, while listed REITs returned around 10–18%, according to Shah’s estimates. The Sensex declined around 9% in the period.
Domestic investors back yield plays
Anuj Puri, chairman of ANAROCK Group said that new-age IPOs struggled post listing but yield-based products have largely less volatile and had stable distributions. “They may not provide euphoric upside, but they have protected against wealth erosion, which is a stronger endorsement in this cycle.”
Unlike traditional IPOs that rely heavily on foreign institutional investors and mutual funds, REITs and InvITs attract a wider domestic investor base including insurers, pension funds, family offices, high networth individuals, treasuries, and retail investors.
The depth of investor appetite allows for a large quantum of funds raised by REITs and Invits, Shah said. "Insurance companies and pension funds are equally sizable in terms of demand like mutual funds.” Some family offices and treasuries have appetite for allocation up to ₹500 crore, he added.
REITs in India have grown well, but the market can become much larger, Blackstone's Mohta said. “As more developers come to market, the REIT opportunity set will expand.” India's large number of commercial real estate owners looking for capital recycling opportunities will enable this. Small and medium REITs (SM REITs) looking to raise less than ₹1,000 crore will also grow the market.