India’s InvIT market is expected to boom—Where are the retail investors?
Sebi is pushing for more InvITs to go public, but an overwhelming majority of 29 such trusts are private, targeting large, sophisticated investors. The regulator's efforts to drive wider participation have not yielded desired results. Here's why…
More than a decade ago, India’s market regulator introduced infrastructure investment trusts, or InvITs, to channel public capital into infrastructure, and further eased rules in the past two years. Still, valuation and liquidity concerns keep these instruments overwhelmingly private.
Only six of India’s 29 registered InvITs are publicly listed, according to data from the Securities and Exchange Board of India (Sebi). These include Capital Infra Trust, IRB InvIT Fund, PowerGrid Infrastructure Investment Trust, Bharat Highways Infrastructure Investment Trust, India Grid Trust and Anantam Highways Trust. Three such InvITs–one of which was publicly listed–have been launched in the ongoing fiscal 2025-26.
Funds mobilised by such instruments surged to ₹1.38 trillion in fiscal 2025 from ₹110 billion in fiscal 2020, according to a November 2025 report by Crisil Intelligence. Assets under management rose to about ₹6.28 trillion, growing at an 18% compound annual rate since fiscal 2021. Industry estimates peg InvIT AUM at ₹21 trillion by 2030, driven by asset monetisation, policy support and rising institutional allocations.
Yet, this expansion has largely escaped the secondary market and retail investors. Private listed InvITs continue to dominate, offering sponsors predictable capital from a small set of sophisticated investors.
An InvIT pools funds by issuing units to investors and deploys those primarily in infrastructure assets, either directly or via a special purpose vehicle or holding company. Unitholders earn regular income from dividends and interest paid by the trust, which owns income-generating assets from toll roads to power projects.
InvITs are classified based on how they raise funds in the initial offer. Public InvITs offer units to all investors and must be listed on stock exchanges. Private listed InvITs raise funds via private placement to institutional investors and corporates, with units listed on exchanges. Private unlisted InvITs are not listed on the exchanges.
Easier rules
The market regulator has been trying to push publicly listed InvITs to draw retail investors. Wider retail participation would ensure that more issuers can raise money in the secondary market, rather than solely relying on institutional players.
Sebi lowered the minimum investment threshold to ₹25 lakh from ₹1 crore in the secondary market in 2024 and aligned the primary market threshold to the same level a year later. Sebi also broadened the strategic investor category to include qualified institutional buyers and certain foreign portfolio investors.
In August 2025, it also simplified the process of converting a private listed InvIT into a public one by removing special sponsor-specific conditions and treating such issues as follow-on offers rather than initial public offerings (IPOs). Yet, the market response has been muted.
“InvITs are more of an institutional asset as of now," said Bhavya Bagrecha, fund manager at Bharat Value Fund, The Wealth Company. “Other asset classes may look more attractive to retail investors for short to medium term investments as the returns on InvITs are 12-14% and the underlying assets also go through cyclical changes that may distort returns."
Less predictable returns
Cyclical changes in infrastructure refer to fluctuations in cash flows and revenues from assets like toll roads, power projects, ports, and logistics, driven by economic cycles, seasonal demand, and operational factors. These variations can distort short-term returns, making infrastructure investments less predictable for retail investors.
Liquidity also remains an unaddressed challenge. Trading in public InvITs is concentrated in a handful of names, resulting in thin volumes and broad bid-ask spreads. Between April and October 2025, the average impact cost for the five listed InvITs ranged from 0.05 to 0.22, compared with 0.01 to 0.04 for Nifty 50 stocks, according to the Crisil Intelligence report.
Impact cost is a measure of market liquidity, where a high impact cost indicates an illiquid market and a low impact cost indicates a liquid one.
“InvITs have caught the attention of pension funds, mutual funds and insurance companies. However, while these investors require daily valuations for declaration of net asset value, valuation of InvITs is rendered complex," said Jiju Vidyadharan, senior director at Crisil Intelligence. Limited public listings, low trading volumes and the unique risks of infrastructure assets make daily valuation difficult, he said.
For retail investors, structural and perception barriers persist.
“People don't have a look and feel of infrastructure," said Vivek Rathi, national director-research at Knight Frank India. Unlike real estate, infrastructure assets are less tangible and have long concession periods, where assets revert to the original owner after 25-50 years, affecting perceived value. Retail participation in InvITs is limited to just 5-10% of total assets under management, he said.
High threshold
Even the reduced ₹25 lakh ticket size has not boosted retail participation.
“Reduction of threshold is a good stepping stone to deepen the market, but awareness is still low," said Bagrecha. “A lot needs to also be done in terms of taxation by the industry and Sebi to make InvITs a more investable product. Tax exemptions like those given for equity products may help the segment."
According to experts, improving the consistency of disclosures and expanding research coverage is crucial for both retail and institutional investors to make well-informed decisions in this evolving asset class. Creating more accessible participation avenues with fewer hurdles can encourage retail interest, while further reducing investment ticket sizes could also make InvITs more attractive, they said.
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