There is a pressing need to expand the investor base in the infrastructure sector and expedite asset monetization to address the growing funding requirements for India’s infrastructure, as articulated by Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Thursday.
During his address at the NaBFID Annual Infrastructure Conclave 2025, Pandey noted that the current market is limited and predominantly reliant on institutional investors, while retail and foreign investors exhibit caution. “Thin secondary market trading means liquidity is limited, which further discourages participation,” he stated.
Asset Monetization Drive
Pandey emphasized the urgency of accelerating asset monetization across various sectors, including roads, railways, ports, airports, energy, petroleum and gas, and logistics. He warned that excessive dependence on banks and government budgets could lead to concentration risks. “State governments, barring a few, have yet to crystallize asset monetization plans to enhance infrastructure development. This gap needs to be addressed,” he added. He pointed out existing models for such monetization, including Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), public-private partnerships (PPP), and securitization.
While there has been an increase in funds raised through municipal bonds, REITs, and InvITs compared to previous years, these amounts remain relatively small. Pandey reiterated the significance of capital markets for sustainable infrastructure funding, noting their role in mobilizing long-term funds, diversifying risks, and allocating capital effectively. Capital markets enable investments from pension funds, insurance companies, sovereign wealth funds, and other long-term investors into infrastructure assets.
As of now, five REITs and 23 InvITs registered with SEBI have raised ₹1,50,000 crore over the past five years, with their assets under management (AUM) reaching ₹8,70,000 crore by the end of FY25. Moreover, infrastructure-focused Category-I Alternative Investment Funds have invested over ₹7,500 crore as of June 2025.
Since 2017, urban local bodies have collected approximately ₹3,134 crore through 21 municipal bond issuances; however, many of these bodies continue to confront challenges such as weak balance sheets and delays in approvals.
This article was published on September 18, 2025.
