India’s renewable energy, roads, and real estate sectors are poised to attract a combined investment of ₹17.5 lakh crore by the end of the current financial year and the next. This represents an annual increase of nearly 15 percent compared to the ₹13.3 lakh crore invested over the last two fiscal years, according to a report by CRISIL Ratings.
The agency’s official press release highlighted the robust growth expected across all three sectors, despite the challenges posed by evolving business models and operational risks. “What remains constant across these three sectors is the strong investment growth. For the current and next fiscal years, investments are projected to rise by 15 percent annually, reaching ₹17.5 lakh crore,” stated Krishan Sitaraman, chief ratings officer at CRISIL Ratings.
The report also noted that out of the 75 GW capacity anticipated to be added in this and the following fiscal year, hybrids will represent 37 percent of this growth. This marks a significant increase, considering that hybrids accounted for only 14 percent of capacity additions in the previous two years.
In the roads sector, which has a substantial multiplier effect on the economy, an increase in project awards is essential for revitalizing growth. For the National Highways Authority of India (NHAI) to return to its previous peak of approximately 6,000 km of awards and execution annually, a notable rise in private investment through accelerated asset monetization will be crucial. “We expect the share of monetization in NHAI’s funding sources to grow to 18 percent in the current and next fiscal year, up from 14 percent in the last two years. The confidence in this growth is supported by a monetizable asset base valued between ₹3.5 lakh crore and ₹4 lakh crore,” the report added.
In the real estate sector, demand in the residential segment is returning to normal after a rapid recovery post-pandemic. Revenue growth for developers is anticipated to remain steady at 10-12 percent for the current and next fiscal years. “As volume growth is expected to stabilize, revenue will be supported by ongoing demand for premium projects. The commercial real estate sector will also experience consistent net leasing growth of 7-9 percent during this period,” mentioned CRISIL.
With India remaining an attractive market for Global Capability Centers (GCCs) and domestic sectors continuing to grow steadily, annual net leasing demand is projected to exceed 50 million square feet by fiscal year 2027.
Manish Gupta, deputy chief ratings officer at CRISIL Ratings, noted that strong operational performance over the past few fiscal years has resulted in robust cash flows, keeping debt levels manageable. “Approximately ₹2.1 lakh crore of equity capital has been deployed in these three sectors over the past two fiscal years, driven by significant investor interest, which supports the credit profiles of developers and projects,” Gupta explained.
For the renewables sector, while debt levels are expected to rise due to high capital expenditure, resilient operational performance will yield stable net debt or EBITDA at around seven times over the current and next fiscal years.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/india-to-attract-%e2%82%b917-5-lakh-crore-investment-in-renewable-energy-roads-and-real-estate-by-fy27/
