Real Estate Investment Trusts (REITs) saw fundraising jump to ₹9,300 crore in FY26 as institutional investors favored larger, stable assets. Conversely, Infrastructure Investment Trusts (InvITs) reported a 21% drop in total funds raised to ₹21,026 crore, shifting toward smaller, asset-specific deals instead of large-scale issuances.
The Indian trust-based capital market saw a clear divide in fiscal year 2026. While Real Estate Investment Trusts (REITs) experienced significant growth in capital raising, Infrastructure Investment Trusts (InvITs) faced a contraction in total volume. This divergence highlights a changing landscape for how infrastructure and real estate assets are monetized in India.
REITs Gain Institutional Favor
REITs collected ₹9,300 crore during the year. A key detail for investors is that the average issue size grew by 31%, reaching ₹3,100 crore. This trend suggests that institutional investors are increasingly comfortable with and attracted to established, income-generating portfolios. The ability of REITs to command larger issue sizes reflects growing confidence in commercial office leasing and the maturation of these trusts as reliable investment vehicles for steady rental income.
InvITs Pivot to Smaller Transactions
In contrast, the InvIT segment saw total fundraising slide by 21% to ₹21,026 crore compared to the previous year. While the total money raised fell, the number of individual issues actually increased to 12. The average issue size dropped by 28% to ₹1,752 crore. Market experts interpret this not as a lack of interest, but as a strategic change. Sponsors are now opting for smaller, more targeted transactions to monetize specific operating assets or recycle capital, rather than relying on fewer, large-scale fundraising events. This approach allows for more flexibility in managing infrastructure portfolios.
Regulatory Changes on the Horizon
Future growth for these sectors will be closely linked to evolving regulations. In August 2026, SEBI released a consultation paper proposing to allow both REITs and InvITs to invest in under-construction third-party projects. This could potentially open new growth avenues by allowing trusts to participate in earlier stages of asset development, though it also introduces risks associated with construction timelines. Additionally, the Reserve Bank of India (RBI) has proposed new rules that could permit banks to lend to REITs, subject to a 10% exposure cap and specific financial criteria. If implemented, this could provide a new financing route for the sector.
Risks and Monitorables
Investors should keep an eye on how these market shifts unfold. The reliance on office leasing momentum for REITs makes them sensitive to broader economic conditions and global demand trends. For InvITs, the move toward smaller, frequent deals suggests a shift in how sponsors view capital recycling, but it also means investors need to track the quality of individual assets more closely. The primary uncertainty remains the implementation of the proposed regulatory changes. Any delay or restriction in the final rules regarding bank lending or construction project participation could impact the expected growth trajectory for both sectors.