India's Infrastructure Boom: Rs 17.5 Lakh Crore Investment Surge

The Indian infrastructure landscape is poised for a transformation, with a projected investment surge of Rs 17.5 lakh crore in the renewables, roads, and real estate sectors over the current and next fiscal, according to a Crisil Ratings report. Investments are expected to grow by 15% annually, compared to Rs 13.3 lakh crore in the preceding fiscals. Despite challenges in adapting to new business dynamics, the credit profiles of developers and projects remain resilient.

Renewable energy is witnessing an accelerated adoption of storage-linked capacities as a solution to power supply intermittency, aiming for consistent power scheduling. Roads are expected to benefit from increased project awards, while the real estate sector sees a shift towards premium offerings and the influx of global capability centers driving commercial real estate growth. An expected steady revenue growth of 10-12% for developers is anticipated, with net leasing in commercial real estate projected to grow by 7-9% per fiscal.

Despite growth challenges, credit risk profiles in renewables, roads, and real estate sectors remain strong, supported by robust operations and significant cash flows. The Crisil report highlights the sector's deleveraging efforts driven by strong investor participation, with Rs 2.1 lakh crore of equity capital deployed over the past two fiscals. This liquidity has reinforced the stability of the sector's credit profiles.

(With inputs from agencies.)