India's REITs and InvITs market is positioned for significant expansion, with Avendus Capital projecting the AUM to double to ₹20 lakh crore over the next five years. According to the Avendus Capital report titled 'Trust the structure: REITs, InvITs and the real imperative', the current market comprises 32 listed trusts with a total AUM of ₹10 lakh crore. The growth trajectory is supported by regulatory improvements and increased institutional participation, with mutual funds significantly increasing their exposure to these investment vehicles.
The regulatory landscape for REITs and InvITs has undergone significant improvements that have enhanced their attractiveness to investors. In January 2026, Sebi classified REITs as equity instruments, facilitating enhanced participation by mutual funds and Specialised Investment Funds (SIFs). Additionally, from February 2026, Sebi allowed more categories of mutual funds to invest in InvITs, leading to substantial mutual fund inflows into these investment vehicles. As reported by Mint, these regulatory changes have made REITs and InvITs more accessible to institutional investors.
REITs and InvITs operate under specific regulatory frameworks that ensure regular income generation for investors. According to Sebi regulations, these investment vehicles must invest a minimum of 80% of their funds in operating and revenue-generating assets, with the remaining 20% in under-construction projects. They are required to distribute 90% of their net distributable cash flows (NDCF) to investors in the form of quarterly distributions. The IndiGrid Infrastructure Trust has provided guidance of ₹16.48 DPU (Distribution Per Unit) for FY 2026-27, with current market price around ₹177 per unit yielding approximately 9%. As reported by Mint, IndiGrid InvIT has delivered 183% total returns since its 2017 listing.
The performance of listed REITs and InvITs has been strong, with the Nifty REITs & InvITs Index delivering total returns of 19.24% in the last one year and 12.79% CAGR over the last five years (as of 30 June 2026). According to Crisil Ratings, the leasable area of commercial office REITs is expected to rise 25-30% by fiscal 2028, reaching 190-195 million square feet. The government has invited bids totalling ₹2.22 lakh crore across power transmission and battery energy storage sectors, indicating potential for new InvIT listings. As reported by Mint, the market offers diverse investment opportunities across sectors including commercial real estate, roads, renewable power projects, and telecom infrastructure.
