India’s infrastructure market set to reach Rs 25 lakh crore by 2030

India is entering a multi-year infrastructure super-cycle, with the Nifty Infrastructure Index giving nearly twice the returns of the Nifty 50 over the past three years, IANS cited Smallcase report on Tuesday.

According to the report, India’s infrastructure stocks has transformed from defensive bets to high-beta, high-alpha performers, and the overall market size could almost double to around Rs 25 lakh crore by 2030.

Government push, private capex revival driving momentum

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The sector’s strong growth is being powered by government spending, PLI schemes, manufacturing incentives, and a revival in private capital expenditure—supported by global supply-chain realignment.

Every Rs 1 invested in infrastructure capex contributes Rs 2.5–3 to GDP, highlighting the sector’s high economic impact, estimated by IANS citing Smallcase report.

The report noted that markets are likely to maintain a high beta to infrastructure execution. Earnings visibility remains robust across engineering, construction, industrials, cement, logistics, and power equipment companies.

InvITs gaining traction with stable returns

Infrastructure Investment Trusts (InvITs) are also expected to grow steadily due to their contract-based, predictable revenue streams, offering pre-tax yields of 10–12 per cent and post-tax returns of 7–9 per cent—higher than many traditional fixed-income options.

Nifty infrastructure outperforms Nifty 50

The Nifty Infrastructure Index returned 14.5 per cent (1 year), 82.8 per cent (3 years), and 181.2 per cent (5 years), outperforming the Nifty 50’s 10.5 per cent, 41.5 per cent, and 100.3 per cent during the same periods, the report said.

Infrastructure assets show lower volatility

“Infrastructure investments in India have shown steadier performance over time. Their historical volatility of about 10.2 per cent is well below the equity market’s 15.4 per cent,” said Abhishek Banerjee, Investment Manager at Smallcase and founder of LotusDew.

With a low correlation of 0.42 to equities, these platforms behave similarly to utilities, offering consistent, inflation-linked income that is relatively insulated from economic cycles, he added.