Wednesday, Jul 17 2024 | Time 15:13 Hrs(IST)
Business Economy

Investments in renewables, roads and realty to rise 38% in two years, says Crisil

New Delhi, June 18 (UNI) Driven by the need for adding more green power to the energy mix, improving physical connectivity and rising demand for residential and commercial real estate, investments in India’s key infrastructure sectors — renewable energy and roads – and real estate are expected to grow 38% in fiscals 2024-25 and 2025-26 to Rs 15 lakh crore.

As per research and rating firm Crisil, roads sector will constitute 60% of these investments, while the balance will be equally divided between renewables and real estate. The roads sector is expected to have 80% of funding coming from central and state governments.

“The underlying demand drivers in these three sectors remain strong, with regular policy interventions fuelling investor interest. This has also supported healthy credit risk profiles of private players and strengthened their execution and funding capabilities,” said Krishnan Sitaraman, Senior Director and Chief Ratings Officer, CRISIL Ratings in a media release on Tuesday.

For renewables, Crisil said, the key growth driver is demand for sustainable energy transition.

"In the roads sector, the need for improved physical connectivity, which helps in efficiency gains for the economy, has driven healthy awarding over the past few fiscals, barring the last one. Strengthened order books of road developers, at 2.5 times of revenue, will support 11% growth in highway construction, which is seen at 12,500 km per year over the next two fiscals," Crisil said.

The research firm said that in the real estate sector, net leasing of commercial office space will see demand growth of 8-10% this fiscal and the next.

"The primary drivers of the same will be global capability centres eyeing India’s large talent pool and competitive rentals, as well as healthy demand from domestic sectors. Demand growth for residential real estate will sustain at 8-12% this fiscal and the next, aided by favourable affordability and premiumisation," it said.


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