ANI mumbai

Capital markets are set to play a crucial role in funding India's infrastructure expansion as the country pushes towards its growth goals, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Thursday. Speaking at the Infrastructure Conclave 2025, Pandey highlighted that infrastructure is not a short-term bet and capital markets allow long-term gains.

Pandey highlighted four key strengths supporting his claims for capital markets: "First, they bring long-term patient capital. Infrastructure is not a short-term bet. Capital markets allow savings from pension funds, insurance companies, sovereign wealth funds, and long-horizon investors to be channelled into such assets," he said. 

Pandey said, capital markets help diversify sources of finance. "Second, relying solely on banks or government budgets exposes us to concentration risk. Markets, on the other hand, offer a palette of instruments, corporate bonds, Infrastructure Investment Trust (InvIT), REITS, municipal bonds that spread risk across multiple participants," he noted.

Accelerate asset monetisation in railways, roads, says Sebi Chief

Sebi's chief Tuhin Kanta Pandey on Thursday said there is a need to "accelerate" monetisation of government-held assets in sectors such as railways, roads, airports and energy to help funnel investor money into such projects.

The career bureaucrat, who headed the Department of Investment and Public Asset Management before being appointed as a regulator, rued that a bulk of state governments are yet to draw plans on asset monetization and stressed that addressing this gap can help give boost to infrastructure creation by opening up resources.

 Infrastructure requires capital in "massive quantities", and the government and banks should not carry this burden by themselves, Pandey said, making a pitch for the capital markets as an alternative to gather the resources.

‘Interest growing for REITs, InvITs but challenges remain’

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.