India’s InvIT and REIT market recorded a strong jump in distributions during the second quarter of FY2026, supported by healthy operating performance across sectors and renewed momentum from new listings, according to ICRA Analytics.
Distributions by public InvITs and REITs rose sharply during the quarter, reflecting the improving cash flows of underlying assets such as roads, power and energy, commercial offices, telecom infrastructure, and warehousing and logistics. The combined distributions crossed Rs. 3,300 crore in Q2 FY26, marking a robust 34.32 percent increase over the previous quarter. Compared with the same period last year, distributions surged by an impressive 55.42 percent.
REITs emerged as the strongest performers during the quarter. The growth was largely driven by sustained leasing activity in office spaces, rising rentals in key markets, and better rent collections. With corporate demand holding steady and vacancy levels improving in several cities, REIT portfolios benefited from predictable income streams and stronger balance sheets.
Road-focused InvITs also reported solid growth in distributions. Higher toll collections, aided by increased traffic volumes and seasonal factors, helped boost revenues. The festive period and steady economic activity supported road usage, translating into better cash flows for investors.
Power and energy assets, while not showing sharp spikes, continued to deliver stable and predictable returns. According to ICRA Analytics, this stability reflects the long-term nature of power purchase agreements and the relatively low volatility associated with energy infrastructure.
Private InvITs, which form a significant part of the market, also posted healthy numbers. Distributions from private InvITs crossed Rs. 4,700 crore in Q2 FY26, registering a 13.44 percent quarter-on-quarter growth compared to Q1 FY26. On a year-on-year basis, distributions rose by 27.53 percent from Q2 FY25, highlighting sustained investor interest in privately held infrastructure assets.
Telecom infrastructure assets continued to perform well during the quarter. Improved tower utilisation and ongoing expansion of digital infrastructure supported steady cash flows. With data consumption rising and network expansion continuing across the country, telecom-focused InvITs remained a key growth driver.
Logistics and warehousing assets also saw healthy quarter-on-quarter increases, benefiting from rising demand for organised storage, e-commerce expansion and supply chain modernisation. Road and logistics trusts together reflected the broader improvement in infrastructure usage and efficiency.
The market also received a boost from new listings. The recent entry of TVS Infrastructure Trust and Knowledge Realty Trust in Q2 FY26, followed by Anantam Highways Trust in Q3 FY26, signals growing investor confidence and increasing maturity of India’s InvIT and REIT ecosystem. These listings have added depth to the market and expanded options for investors seeking yield-generating assets.
Looking ahead, the outlook remains positive. Madhubani Sengupta, Head – Knowledge Services at ICRA Analytics, said momentum in commercial real estate leasing, festive-season tailwinds for traffic revenues, and rising demand in telecom infrastructure, solar power and energy are expected to support distributions in Q3 FY26 as well.
With steady cash flows, improving asset performance and a growing investor base, InvITs and REITs continue to strengthen their position as an important investment avenue in India’s infrastructure and real estate landscape.
