Realty, renewables, roads to see Rs 17.5 lakh cr investment boost

India’s real estate sector is undergoing a strategic transformation, led by sustained demand for premium housing and a rising influx of Global Capability Centres (GCCs) in commercial spaces. This realignment is unfolding alongside robust capital deployment, with real estate, renewables, and roads expected to attract cumulative investments of nearly Rs 17.5 lakh crore over this fiscal and the next—marking a 15% annual increase from Rs 13.3 lakh crore in the previous two years, according to Crisil Ratings.

In residential real estate, sales and collections remain healthy, but a wave of new launches is pushing up inventory. After touching a low of 2.7 years in FY24, inventory is projected to rise to 2.9–3.1 years this fiscal. Yet, developer revenues are expected to grow at a steady 10–12% annually, underpinned by sustained demand for premium projects.

Commercial real estate, buoyed by India’s continued cost advantage and steady expansion of domestic sectors, is seeing stable momentum. Net leasing is expected to grow 7–9% this fiscal and the next, with annual demand projected to cross 50 million sq ft by FY27.

“What remains constant across these three sectors is the strong investment growth,” said Krishan Sitaraman, Chief Ratings Officer, Crisil Ratings. “While adapting to the new business dynamics will pose some challenges, credit profiles of Crisil-rated developers and projects would remain resilient.”

While the real estate sector evolves, the renewable energy and roads sectors are witnessing their own shifts. Renewables are moving towards hybrid and storage-linked capacities, with 37% of 75 GW planned additions over two years expected from hybrid sources—up from 14% earlier.

Roads, meanwhile, are betting on monetisation, with NHAI’s asset base of Rs 3.5–4 lakh crore helping raise its monetisation share from 14% to 18%.

However, each sector faces challenges. In real estate, excess supply could lead to higher debt. In renewables, transmission capacity may lag installations. Roads may see monetisation delays due to approval or valuation hurdles.

Yet, balance sheets remain healthy. Manish Gupta, Deputy Chief Ratings Officer, Crisil Ratings, said, “Cumulatively Rs 2.1 lakh crore of equity capital has been deployed in these sectors over the past two fiscals, supporting credit profiles.”

With InvITs and REITs strengthening funding frameworks, and strong operating cash flows across sectors, India’s infrastructure story is expected to remain resilient, even as global and execution-related risks bear watching.