India's Infrastructure Investment to Grow Sharply by 45-50%: Crisil Ratings
According to a recent report by Crisil Ratings, India's investment in key infrastructure sectors is expected to grow sharply by 45-50% over the current and next fiscals, supported by strong policy push and domestic demand.
Key Infrastructure Sectors to Witness Significant Growth
- Renewables: Capacity addition is expected to remain strong, with 50-55 giga-watt (GW) annually over the current and next fiscals, backed by a robust project pipeline and policy support.
- Roads: Strong growth in the sector is expected, with investments in roads and highways contributing to India's GDP growth trajectory.
- Real Estate: The sector is expected to witness growth, with around 15-20% of investments in these sectors funded through equity.
- Data Centres and Green Hydrogen: Emerging areas that account for around half of India's total infrastructure investments, with data centre capacity expected to increase 35-40% annually through fiscal 2028.
Risks and Challenges Ahead
- Delays in Renewable Energy Of Takfe: The report flagged delays in renewable energy offtake as a risk across sectors.
- Slowdown in Road Project Awarding: The report noted a slowdown in road project awarding as a challenge in the sector.
- Rising Inventories in Residential Real Estate: The report highlighted rising inventories in residential real estate as a risk in the sector.
Infrastructure Players Remain Financially Resilient
Despite these challenges, Crisil said infrastructure players remain financially resilient, with most of the players in the established sectors well-positioned to overcome them, given their strong track records and execution capabilities.
Timely Execution and Prudent Financial Management Key to Success
The report emphasized that timely execution and prudent financial management will remain key as infrastructure investment momentum continues amid global uncertainties.