Informist, Thursday, Sept. 18, 2025

MUMBAI – New avenues to fund infrastructure projects using Real Estate Investment Trusts and Infrastructure Investment Trusts have gained traction over the last few years, but the amount raised through these instruments remains small, said Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India. However, Pandey said he was confident these avenues will find more takers in the future.

Speaking at an event organised by the National Bank for Financing Infrastructure and Development, the SEBI chairman pushed for municipal bonds as an important avenue for states to raise money, which can then be used to fund infrastructure projects. He said the importance of municipal bonds cannot be "overstated" and it can become a key pillar in financing urban infrastructure projects.

He said the scale of fund-raise remains a challenge for these new avenues. "The investor base is still narrow, institutional investors dominate while retail and foreign investors are cautious," he said. Some investors also stay away from REITs, InvITs, and municipal bonds as liquidity in the secondary market is low.

Pandey said some of these challenges can be addressed by the government accelerating asset monetisation plans in various sectors. Several states have yet to start focusing on asset monetisation and they need to address gaps related to this, he said. The SEBI chief said capital market instruments were important as public resources alone cannot meet infrastructure investment requirements. End

Reported by Anshul Choudhary and Kabir Sharma

Edited by Tanima Banerjee

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