Capital markets are set to play a key role in financing India’s infrastructure expansion as the country advances toward its growth goals, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Thursday.
Speaking at the Infrastructure Conclave 2025, Pandey stressed that infrastructure is not a short-term bet and requires patient capital. He said capital markets are well-suited to meet this demand, offering long-term gains.
Pandey outlined four key strengths of capital markets: their ability to channel long-term savings from pension funds, insurance companies, sovereign wealth funds, and institutional investors; diversification of financing sources beyond banks and government budgets; risk-sharing through instruments such as Infrastructure Investment Trusts (InvITs); and the enforcement of discipline and transparency through disclosure norms, independent audits, and investor scrutiny.
“These features make capital markets not just financiers, but also guardians of quality and credibility in infrastructure projects,” he said.
The SEBI Chairman noted the rising use of IPOs, rights issues, and private placements by infrastructure firms, which now account for nearly one-fifth of the market capitalisation of listed companies. Over the past decade, infrastructure indices have delivered annualised returns of 12–14 per cent, reflecting the sector’s steady value for investors.
Pandey also cited the role of Real Estate Investment Trusts (REITs) and InvITs. As of FY25, five REITs and 23 InvITs registered with SEBI have mobilised Rs. 1.5 trillion, with assets under management of Rs. 8.7 trillion. He pointed to the National Highways Infrastructure Trust as an example where operational assets were monetised, freeing capital for new projects while offering investors stable returns.
Alternative Investment Funds (AIFs) have grown fivefold in five years—from Rs. 1.1 lakh crore in March 2019 to Rs. 5.7 lakh crore by June 2025. Infrastructure funds under Category I AIFs alone have invested over Rs. 7,500 crore, creating tangible impact, Pandey said.
He further underlined the potential of municipal bonds for urban infrastructure. Since 2017, local bodies in cities including Chennai, Varanasi, Agra, and Ahmedabad have raised Rs. 3,134 crore through 21 issuances. Green bonds are also gaining traction, with 24 issuances raising over Rs. 7,500 crore for renewable energy and clean transport projects.
“Infrastructure is more than roads, ports, airports, dams, telecommunication, or power plants. It is the backbone of economic progress. It connects producers to markets, people to opportunities, and India to its aspiration of becoming a $5 trillion economy,” Pandey said.
-ANI