InvIT IPOs gain momentum with deals worth over Rs 20,000 crore in the pipeline

India’s InvIT market has seen just four IPOs after the first such trust went public in 2017.

In the other hand, close to 20 private InvITs have been set up by private equity investors such as KKR, Brookfield, I Squared Capital, Actis and corporates such as Mahindra group, TVS group and even NHAI, which operates a private trust backed by Canadian pension funds CPP Investments and Ontario Teachers’ Pension Plan.

IRB InvIT Fund was the first infrastructure investment trust to go public, raising about Rs 5,000 crore through its IPO in May 2017, followed shortly by India Grid Trust, which mobilised Rs 2,250 crore. In May 2021, PowerGrid InvIT IPO raised nearly Rs 4,993 crore.

More recently, Bharat Highways InvIT launched its IPO in early 2024 and garnered about Rs 2,500 crore, while Capital Infra Trust raised Rs 1,578 crore in January 2025.

Shift in fundraising strategy

Market participants point to a change in investor appetite, driving this shift towards IPOs instead of private placements.

With global institutional investors getting higher yields abroad, driven by higher interest rates, especially in the US, Indian InvITs are not as attractive for them.

Domestic investors, including insurance firms, corporate treasuries, family offices, and high-net-worth individuals, are showing growing interest in such yield-generating products.

Shweta Rajani, Head of Mutual Funds at Anand Rathi Wealth Ltd, said the surge in InvIT IPOs is also being fuelled by rising participation from retail investors.

“With rising awareness about these products, broader participation from investors in this category has increased. In fact, recent REIT (real estate investment trust) and InvIT issues have seen a good response from retail investors,” she said.

According to Arka Mookerjee, partner at law firm JSA, InvITs are attracting investors because of their low risk and steady income.

“Investors are drawn to InvITs for their stable and predictable income streams, backed by operational infrastructure assets like roads, transmission lines, and pipelines. The mandatory 90 percent distribution rule ensures regular payouts, typically on a quarterly basis,” Mookerjee said.

InvITs usually exhibit lower price volatility than equities and offer liquidity through listed units, benefits absent in direct infrastructure investments. The tax pass-through structure further improves post-tax returns, he said, while SEBI’s governance norms and disclosure requirements provide confidence to investors.

“Recently, SEBI eased out the entire process of converting a private InvIT to a public InvIT by reducing the requirement of a mandatory lock-in of units of a sponsor,” Mookerjee said.

Rajani, however, cautioned that liquidity remains a concern. “Only about 25 to 30 per cent of the well-known investment trusts have healthy liquidity and register meaningful daily trading volumes,” she said. “The majority suffer from thin trading activity, making it difficult for investors to exit positions when needed. Therefore, investors should be cautious and preferably selective when choosing the right investment.”

Public and private InvITs

InvITs, which hold infrastructure assets such as toll roads, renewable projects or transmission lines, are yield-generating investment vehicles that distribute the cash flows from projects to shareholders.

SEBI says InvITs can either be “public” or “private”. The units of private InvITs are also listed on a stock exchange but since they are closely held by a few investors, they are not traded daily. They also have fewer disclosure norms to follow compared to their “public” counterparts.