April 8, 2024: Interest from investors in Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) is rapidly increasing, with fundraising through these avenues reaching Rs 17,116 crore in the fiscal year 2023-24 (FY24). This marks a significant 14-fold increase compared to the previous year. According to data from Prime Database.com, fundraising by REITs and InvITs surged to Rs 17,116 crore in FY24 from a record low of Rs 1,166 crore in FY23. Notably, the fiscal year also saw the first-ever Offer-for-Sale (OFS) by an InvIT, with Data Infrastructure Trust raising Rs 2,071 crore.
In FY21 and FY20, funds raised through these channels amounted to Rs 13,841 crore and Rs 33,515 crore, respectively. While REITs and InvITs are relatively new concepts in the Indian market, they have gained popularity globally for their attractive returns and capital appreciation. Since their introduction in 2014, these investment vehicles have experienced significant growth. The first investment trust was registered with Sebi in FY17. Presently, there are 24 registered InvITs and five REITs, boasting an asset base exceeding Rs 5.5 lakh crore.
REITs and InvITs offer the potential for generating appealing returns as they are required to distribute a specific percentage of their income to investors, making them an enticing investment option. These factors have contributed to the growing popularity of REITs and InvITs as preferred investment vehicles, resulting in a higher quantum of investments witnessed by this sector.
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