A policy push to develop multi-sector or diversified Infrastructure Investment Trusts (InvITs) in India has slowed, as regulators and industry stakeholders grapple with unresolved issues around governance, valuation, and operational complexity.
Senior policymakers and infrastructure experts believe that bundling assets across sectors into a single InvIT platform could unlock greater value and diversify risk. However, under the current regulatory and governance framework, sector-specific InvITs continue to be the preferred route for asset monetisation by both central and state governments.
Speaking at the ET Infra Finance Summit, Rakshit Jain, Managing Director and CEO of National Highways Infra Trust (NHIT), said earlier discussions had explored the idea of centralising assets from multiple states into a single InvIT structure. However, consultations with regulators led to a consensus that a sectoral approach remains more practical at present.
“Even when incorporating state assets, it is advisable to do so on a sectoral basis rather than adopting a multi-sectoral model,” Jain noted, reflecting the current stance within the government.
NHIT, established by the National Highways Authority of India (NHAI) in 2020, has played a key role in monetising highway assets by attracting institutional investors and pension funds.
Medium-Term Potential
While multi-sector InvITs are not seen as immediately viable, policymakers acknowledge their long-term potential. V. Umashankar, Secretary at the Ministry of Road Transport and Highways, described them as a “medium-term” opportunity.
There is growing consensus that as infrastructure sectors such as roads mature—where InvITs have already proven successful—diversified InvITs could emerge by integrating assets from other sectors that reach similar levels of stability and growth.
Umashankar highlighted that a diversified InvIT model could offer investors exposure to multiple infrastructure segments, helping balance returns as growth in individual sectors fluctuates.
Regulatory and Operational Challenges
Despite their theoretical advantages, multi-sector InvITs face significant hurdles in India’s current ecosystem.
Anurag Gupta, Partner at Deloitte India, pointed out that valuation complexities remain a major concern. Unlike sector-specific InvITs, where asset valuation is relatively straightforward, diversified trusts must account for fundamentally different risk-return profiles—such as traffic-dependent toll roads versus availability-based power transmission assets—making Net Asset Value (NAV) calculations more challenging.
Operational challenges also loom large. Managing assets across sectors requires specialised expertise in each domain, potentially increasing costs and complicating accountability structures.
Echoing similar concerns, Meghana Pandit, CFO of IndiGrid Infrastructure Trust, said multi-sector InvITs are still “nascent” in India, with key issues around risk assessment, governance frameworks, and valuation methodologies yet to be fully addressed.
Sectoral InvITs Continue to Dominate
India’s regulatory framework for sector-focused InvITs has matured significantly, supported by strong oversight from the Securities and Exchange Board of India (SEBI). This has enhanced investor confidence and recently enabled broader retail participation.
Notably, NHAI’s Raajmarg Infra Investment Trust (RIIT) public issue, valued at ₹6,000 crore, was opened to both institutional and retail investors—underscoring the growing acceptance of the instrument.
Industry experts say that while diversified InvITs could offer resilience against sector-specific downturns, investors currently prefer the transparency and simplicity of “pure-play” sectoral trusts.
Outlook
Under the National Monetisation Pipeline (NMP) 1.0, the government achieved nearly 90% of its ₹6 lakh crore target, with InvITs—particularly in the road sector—emerging as a key financing tool.
Looking ahead, InvITs are expected to play a central role in achieving the ambitious ₹16.72 lakh crore asset monetisation target under NMP 2.0 (FY26–FY30). While multi-sector InvITs remain on the horizon, their rollout will likely depend on further regulatory clarity and the maturation of multiple infrastructure sectors.
For now, India’s asset monetisation strategy will continue to rely on sector-focused InvITs as the backbone of infrastructure financing.
