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According to Investment managers on smallcase, infrastructure equities have evolved from defensive to high-beta, high-alpha sector in 2023—2025. The managers note that Nifty Infrastructure Index, with returns of 14.5%, 82.8% and 181.2% over the past 1, 3 and 5 years, has consistently outperformed the Nifty 50, which delivered returns of 10.5%, 41.5% and 100.3% over the same periods. The Nifty Infrastructure index returned nearly 2x the Nifty 5O over the past three years. They note that each Rs 1 of capex delivering in infra is having an estimated ~Rs2.5-Rs 3.0 impact on GDP.

According to managers, India is entering a multi-year infra super-cycle. The managers said that while government spending remains the anchor, but private capex revival—helped by PLI schemes, global supply-chain shifts, and manufacturing incentives—adds strength to infrastructure sector growth. They believe markets are likely to maintain a high beta to infrastructure execution; earnings visibility across engineering, construction, industrials, cement, power equipment and logistics remain robust.

Abhishek Banerjee, Investment manager on smallcase, and founder of LotusDew said, “Infrastructure investment in India is expected to grow substantially in the coming years, with InvITs likely to manage close to Rs 25 lakh crore in assets by 2030. This expansion is underpinned by predictable, contract-based revenue streams that usually provide pre-tax yields of around 10–12% and post-tax returns of roughly 7–9%, generally higher than many conventional fixed-income instruments. Although these assets can experience temporary fluctuations during periods of market uncertainty, their historical volatility of about 10.2% is well below the equity market’s 15.4%, resulting in comparatively steadier performance. With a correlation of only 0.42 to equities, infrastructure platforms tend to behave similarly to utilities, producing consistent, inflation-linked income that is largely unaffected by economic swings.”

Investment managers on smallcase projects that over FY26-FY30, infra-linked sectors are expected to see robust growth, stable order books, and strong free-cash-flow generation. They believe that for investors, infra exposure remains a key thematic long-duration opportunity.

Rakesh Pujara, Investment manager on smallcase, Founder and Managing Partner at Compounding Wealth Advisors LLP said, “India is currently witnessing an 'Infrastructure Supercycle', powered by a record Rs 11.11 lakh crore government capital expenditure (capex) budgeted for FY25 and further supported by FY26 capex guidance of Rs 11.21 lakh crore. The country is transitioning from basic connectivity creation to building advanced, integrated logistics ecosystems supported by digital infrastructure, advanced mobility networks, and sustainable energy corridors.”

India's infrastructure sector stands at a pivotal moment in 2025, with government spending on capital projects topping Rs 11.21 lakh crore, or 3.1% of GDP, alongside policy pushes like the National Infrastructure Pipeline and growing private sector involvement through Infrastructure Investment Trusts. This momentum spans traditional and new areas, setting the stage for a market valued at Rs 16.87 lakh crore in 2025 to expand to Rs 24.82 lakh crore by 2030 at an 8% compound annual growth rate. For investors, these developments signal opportunities in construction, logistics, and energy stocks, while lifting broader market confidence through job creation and economic multipliers.

Pankaj Singh, Investment manager on smallcase, and Founder & Principal Researcher – SmartWealth.ai said, “India’s infrastructure ecosystem is at a historic inflection point, powered by record government capex, a decisive revival in private investment, and forward-looking reforms. Traditional assets—roads, ports, airports, power—are scaling rapidly, while new-age sectors such as green hydrogen and data centres are emerging as strategic national priorities. For equity markets, infrastructure has clearly transitioned from a cyclical opportunity to a structural, long-duration growth theme aligned with India’s ambition of becoming a top-three global economy by 2047. We can expect Infra to remain a dominant market theme for the rest of the decade.”

Key Infra Sectors:

Highways & Roads

India’s road infrastructure remains the backbone of the capex cycle, with the national highway network reaching 146,342 km and annual construction consistently above 10,000–11,000 km, supported by Bharatmala, expressway corridors and strong NHAI execution. Funding visibility is stable through HAM, PPP, TOT and fast-growing road InvITs that have monetised over Rs 70,000 crore. Rising order books, predictable government capex and a deep pipeline under Vision 2047 continue to benefit EPC/HAM developers, cement and steel suppliers, equipment OEMs, toll operators and asset managers.

Airports & Aviation

India’s aviation ecosystem is expanding at one of the fastest global rates, with operational airports rising from 74 in 2014 to 163+ in 2025, backed by UDAN, greenfield expansions and AAI asset monetisation. Passenger traffic has rebounded sharply, crossing 150 million domestically and 202 million overall (Apr–Sep 2025). With a long-term target of 350–400 airports by 2047, rising non-aero revenues, airport privatisation and cargo/MRO growth, the opportunity set broadens for airport operators, terminal services, retail concessions, fuel suppliers and maintenance ecosystems.

Seaports, Maritime & Logistics

Sagarmala-driven reforms have reduced turnaround times and boosted throughput, with major ports handling ~795 MT in FY24 and all-India capacity targeted beyond 3,300 MTPA by 2025. Logistics, a US$317 billion market in 2024, is projected to reach US$484 billion by 2029 (CAGR 8.8%) on multimodal integration, mechanisation, coastal shipping and DFC-linked efficiency gains. Port-led industrialisation, a Rs 25,000 crore Maritime Fund, and logistics parks continue to lift prospects for port operators, container terminals, integrated logistics firms, warehousing, cold-chain and hinterland transport players.

Energy & Power (including Renewables)

India’s power sector is undergoing a major transition, with total capacity at 476 GW (June 2025) including 180 GW+ renewables, and a 2030 target of 500 GW non-fossil. Rising demand (6–7% CAGR), peak load nearing 249 GW, and investments in transmission corridors, smart grids, hybrid parks and storage systems are creating long-duration order visibility. Policy support through PLI schemes, RE parks and early hydrogen pilots is driving growth for renewable EPCs, turbine/inverter makers, transmission utilities and battery-storage developers.

Data Centres & Digital Infrastructure

India’s data-centre capacity has surged from ~350 MW (2019) to 1,030 MW (2024) and is on track for 1,700 MW by 2025, supported by cloud adoption, AI/ML workloads, data localisation and hyperscaler expansion. The sector, valued at Rs 89,482 crore in 2025, is projected to double by 2030 with rising power demand (expected to reach 8 GW), high utilisation levels and strong state incentives. Beneficiaries include DC developers, real-estate platforms, power and cooling suppliers, fiber providers and interconnect ecosystems.

Green Hydrogen & Emerging Fuels

With a 5 MTPA target by 2030, India’s National Green Hydrogen Mission is accelerating early investments, electrolyser manufacturing and industrial pilots across steel, refineries and fertilizers. Backed by Rs 19,744 crore support and 125 GW renewable-linked pipelines, the sector is moving from pilot to scale, with 158 projects (11.2 MMTPA) already in the pipeline. Long-term potential of $30–40 billion and export-led opportunities to Europe/Asia position electrolyser makers, renewable-hydrogen developers, catalyst suppliers and port-based export nodes for multi-year growth.