Market Intelligence

& Analytics
 Contents

Executive summary 05

Higher government capex to

drive infrastructure growth 06

Government will lead funding, supported

by financial institutions and asset monetization 10

Private investments will boost

infrastructure investment cycle 20

Emerging segments in India

for attractive investment opportunities 28
Market Intelligence
& Analytics
 Executive summary
Building India

Between fiscals 2024 and 2028, the central Focus on transmission and distribution will
government is expected to spend a whopping Rs 88 strengthen the grid energy efficiency and advanced
trillion in capital expenditure on infrastructure, an metering infrastructure will reduce losses.
increase of ~80% compared with ~Rs 49 trillion in the
Renewable energy integration will boost growth of
previous five fiscals.
the segment, raising its share in total capacity 4x
Government capex has historically been the driver of over fiscals 2023-30; its share in the generation mix,
India’s infrastructure buildout — soaring ~800% from though, will grow slower.
a relatively modest Rs 1.12 trillion in fiscal 2014 to an
Asset monetisation will support funding, given the
estimated Rs 10 trillion in fiscal 2024.
huge potential presented by a large quantum of
These numbers underscore the government’s monetisable assets, especially roads and renewables,
recognition of infrastructure development as pivotal for top private players.
to economic progress.
Green bonds support renewable energy projects
Roads, railways and urban infrastructure have by providing wider access to domestic and foreign
continued to lead infrastructure growth, consuming capital. Infrastructure focused Non-banking financial
more than two-thirds of the overall capex pie. companies (NBFCs) have also raised funds through
green bonds.
India’s commitment to capital investment has been
substantial in recent years, with gross fixed capital Among other sectors that have investment potential,
formation (GFCF) increasing 55%. Notably, the share warehousing is expected to experience high growth.
of infrastructure-related GFCF as a percentage of Simultaneously, the data center industry is expected
total GFCF has increased from 9.6% in fiscal 2013-17 to log a compound annual growth rate (CAGR) of
to 14.1% in fiscal 2018-22. ~20% between fiscals 2024 and 2028, led by robust
investments by Indian and global players. Spending
In years to come, infrastructure investment from the
on urban infrastructure is expected to reach Rs
private sector is expected to boost the investment
7.4 trillion over fiscals 2024-28, more than double
cycle.
the amount invested in the previous five years,
After a prolonged period of sluggishness, the capex with CAGR of 10-15%, driven by central government
cycle — especially corporate capex — has seen a schemes.
resurgence since fiscal 2021, spurred by all that
government spend.

The concerted activity will lead to investments in

roads and railways almost doubling over the next
five years. Road capex, in particular, is expected to
increase 1.8 times over the medium term, led by
construction of national and state highways.

The power sector will not be far behind. With power

demand directly correlated to India’s gross domestic
product, demand growth is pegged at ~6% until
fiscal 2030, higher than the 30-year average of 5.4%.

5
Market Intelligence
& Analytics

Higher government
capex to drive
infrastructure growth
There has been a notable change in the government’s priorities, with a clear
emphasis on infrastructure development, as indicated by the increasing trend in
capital expenditure. Key sectors such as Roads, Railways, and Power have taken
a prominent role in this development and are expected to continue attracting
investments in the foreseeable future. Additionally, the infusion of private
capital expenditure is anticipated to play a crucial role in augmenting India’s
infrastructure, complementing various government initiatives like
Gati Shakti and the National Infrastructure Pipeline.

In recent years, the government’s commitment an impressive Rs 10 trillion this fiscal, marking a jump
to fostering economic growth through a robust of nearly 800%.
infrastructure backbone has reflected in an increase
More telling has been the increase in capex as a
in its capital expenditure (capex) for infrastructure
percentage of GDP — more than trebling from a
development from just Rs 1.12 trillion in fiscal 2014 to
mere 1% in fiscal 2014 to 3.5% this fiscal.

Infrastructure capex to be driven by government spending

3.50%

12 4.00

2.70% 3.50
10 2.60%

2.20% 10.0 3.00

8 1.80%
1.70% 2.50
1.60% 7.3
Rs trillion

1.00% 1.00% 1.00% 1.00% 6.0

6 2.00
4.4
3.5 1.50
3.1 3.0
4

1.00
1.1 1.2 1.4 1.5
2
0.50

0 0.00
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

GBS - Gross Budgetary Support Capex % GDP

Source: CRISIL MI&A Research

6
The Reserve Bank of India’s recent study highlights traditional growth drivers – roads and railways –
the economic impact of capex, with a significant have made way for some additions, notable ones
gross domestic product (GDP) multiplier of 2.45 being power generation, urban infrastructure, and
in the first year and 3.14 in the following year for renewable energy (RE).
every rupee spent by the central government. The

Overall infrastructure spends till FY28 is expected to be driven majorly by Roads, Railways & Power

100 1.4

1.21 1.19
90 4%
1.2
18%
80

29% 1
70
0.82 21%
60
0.8
Rs trillion

5% 28%
50 7% 18%
0.58
30% 88 0.6
40
25% 39%
10%
30 14% 16%
35% 0.4
30% 49
36% 8%
20
11% 34
15% 0.2
10 23
10
0 0

Growth multiplier calculated as CAGR of block infrastructure spends over CAGR of block current GDP spends (block period : 5 years)
Growth multiplier (GM)

Note - GM is calculated as: (CAGR of 5 years infrastructure spends / CAGR of 5 years current GDP spends)
Source: CRISIL MI&A Research

Roads, railways, power and urban infrastructure will lead growth

Infrastructure investments surged from Rs 7.7 trillion importance of transportation for economic growth
in fiscal 2019 to Rs 12.2 trillion in fiscal 2023, at 11% and connectivity. Urban infrastructure investments
CAGR. increased from 10% in fiscal 2019 to 15% in fiscal
2023, reflecting a growing focus on improving urban
Notably, there has been a shift in investment
living standards and fostering sustainable urban
allocation within the sector. Investments in roads
development.
and railways have consistently accounted for 45-50%
of total infrastructure investments, emphasising the

7
Market Intelligence
& Analytics

Roads, railways and power lead in infrastructure sector with 71% of capex share in fiscal 2023

140

12.2
120 4%
10%
9.8
100
4% 15%
8.1 10%
7.9
Rs trillion

80 7.7
6% 5% 15%
6% 12% 22%
11% 10%
60 10% 10% 10% 22%

26% 22% 21%

27%
40
19%
19% 19%
17%
20
28% 29% 32% 29% 28%
00
FY19 FY20 FY21 FY22 FY23

Roads Railways Power Urban Infra Irrigation Other Infra

Source: CRISIL MI&A Research

The Indian government has launched initiatives investment multiplier of 2.2x, with water supply and
such as the National Infrastructure Pipeline (NIP), sanitation (WSS) accounting for a significant portion
National Monetisation Pipeline (NMP), Gati Shakti, of it. Additionally, the roads, railways and power
Bharatmala and Jal Jeevan Mission to deliver top- sectors are expected to witness nearly a twofold
tier infrastructure facilities and create a business- increase in investments, underlining their continued
friendly environment. Over the next five years, urban importance in India’s infrastructure development.
infrastructure is projected to have a substantial

Roads & railways & urban infra are leading sectors in infrastructure having CAGR >10% in last 5 years

2.4
Urban infra
Capex multiplier for 5-year period

2.2
Power
Railways
2.0
Roads

1.8
Other infra Irrigation
1.6

1.4

1.2

1.0

0% 5% 10% 15% 20% 25%

fiscal 19-23 CAGR

Source: CRISIL MI&A Research

8
Gross fixed capital formation in infrastructure to increase, private investments to
become more attractive

Over the period of fiscal 2013 to fiscal 2022, India fiscals 2018 and 2022. This shift reiterates the
demonstrated a substantial commitment to capital strategic emphasis on infrastructure development,
investment, with gross fixed capital formation (GFCF) highlighting its critical role in improving the
increasing 55%. The share of infrastructure-related nation’s physical assets, sustaining economic
GFCF as a percentage of total GFCF increased from growth, enhancing living standards and creating a
9.6% between fiscals 2013 and 2017 to 14.1% between competitive business environment

infrastructure sectors’ share in overall GFCF has been on an increasing trend

Infra GFCF as % overall GFCF

60

50

40
Rs trillion

30

20

10

11.9% 7.7% 8.2% 11.4% 13.4% 14.8% 14.1% 13.5% 14.6%

0 9.0%
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Infra gross fixed capital formation (GFCF) Gross fixed capital formation (GFCF)

Source: MoSPI, CRISIL MI&A Research

Furthermore, the increase in private corporations’ in this space. Private companies are increasingly
GFCF from Rs 11.4 trillion to 17.6 trillion over the same recognising the value and returns of infrastructure
period is noteworthy. However, the relatively modest investments, and there are opportunities to
growth in private corporations’ contributions to incentivise and attract more private sector
infrastructure, from 8% to 9%, suggests untapped investments in infrastructure.
potential for greater private sector involvement

Share of private infra GFCF has remain muted

25

20
Rs trillion

15

10

5
6.5% 7.4% 10.3% 11.3% 9.4%
12.5% 7.5% 6.0% 7.5%
0 6.7%
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Private infra GFCF Private GFCF

Source: MoSPI, CRISIL MI&A Research

9
Market Intelligence
& Analytics

Government will lead funding,

supported by financial institutions
and asset monetization
Capex towards Infrastructure is projected at Rs 88 trillion for next 5 years. The
share of private sector in infrastructure investments was 18-22% in last 3 years.
Central and state governments have played important role in funding. Central
government’s infrastructure budgetary allocation more than tripled from Rs
3 trillion in fiscal 2019 to Rs 10 trillion in fiscal 2024. Total Indian green bond
issuances were $21 billion as of February 2023, with the private sector accounting
for 84% of total issuances. National Monetisation Pipeline, was drawn up to create
revenue sources from unutilised or under-utilised public assets

Key government initiatives for infrastructure development

PM Gati Shakti and execution, focusing on improving multi-

modal and last-mile connectivity. PM Gati Shakti
The PM Gati Shakti initiative is a crucial step in
operates through seven key drivers – roads, railways,
India’s pursuit to become a $5-trillion economy.
airports, ports, mass transport, waterways and
It aims to benefit various stakeholders, including
logistics infrastructure – to boost comprehensive
citizens, industries, farmers and rural communities.
infrastructure development and national progress.
Its primary goal is to eliminate bureaucratic barriers
and promote a unified approach to project planning

Ministry-wise targets/achievements under PM Gati Shakti

Total length of national highways (km) Cargo handled by railways (million tonne)

200000
in million tonnes

1600
141190 1410
133608 1210
91287 1053
in kms

2014-15 2020-21 2021-22 Target by 2014-15 2020-21 2021-22 Target by

2024-25 2024-25

Airports/heliports/water aerodromes Cargo handled at ports (MMTPA)

220
1759
111 140
in kms

74 1189
1282
1051
MMTPA

2014-15 2020-21 2021-22 Target by

2014-15 2020-21 2021-22 Target by
2024-25
2024-25

10
Length (km) of gas pipelines Power transmission network (circuit km)
454200
34500 425500 454540
20000

circuit kms
17500 302550
in kms

15000

2014-15 2020-21 2021-22 Target by 2014-15 2020-21 2021-22 Target by

2024-25 2024-25
RE capacity (GW) 225

87.7 87.7
35.5
GW

2014-15 2020-21 2021-22 Target by

Source: PIB, CRISIL MI&A Research 2024-25

National Infrastructure Pipeline (NIP)

National Infrastructure Pipeline in India is a the importance of integrated logistics and aligning
government initiative aimed at boosting economic infrastructure development with Sustainable
growth by investing in infrastructure projects. Development Goals.
Announced in 2019, for investing in various sectors
In the NIP framework, ~81% of total infrastructure
such as energy, transportation, water, and social
investment is allocated to roads, power, railways
infrastructure.
and urban infrastructure. However, a significant
NIP aims to channel substantial investments portion of infrastructure development still relies on
amounting to Rs 147 trillion (original target of 111 public funds, with 64% of projects planned under
trillion) into India’s infrastructure over five years, to the engineering, procurement and construction
support the nation’s goal of becoming a $5-trillion (EPC) mode, particularly in railways and roads. The
economy by fiscal 2025. NIP focuses on improving government is expected to play a pivotal role in
infrastructure on the supply side, with the aim of initiating spending and demonstrating effective
stimulating economic growth, creating employment project execution.
and contributing to GDP growth. It emphasises

About half of NIP target projects are under construction

111 142 147 Achievement of original NIP targets
Total
(Rs trillion)
Original NIP target Revised target 43% 25% 32%
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0
Energy 36% 30% 34%

Road 52% 37% 11%

Urban
infrastructure 26% 25% 49%
FY20-FY23E
Railways Original target
Revised target 1 55% 43% 2% FY24-FY25P
Irrigation Revised target 2 Yet to be achieved
44% 29% 27%
Ports

Others 39%
61%

Notes: Project stats as per initial capital outlay target of Rs 111 trillion. LHS: Transport includes roads, railways, metros, ports, and airports. Energy includes
thermal, renewables, etc. Water includes irrigation and sanitation. Social includes urban housing, medical and education infrastructure. Others include
telecom, cold chains and industrial parks
Source: IIG, CRISIL MI&A Research

11
Market Intelligence
& Analytics

NHAI paving the path of growth in

Reduction in IEBR has improved NHAI’s debt-to-equity
roads sector, with its debt to equity
ratio, and hence, its financial profile
lowest in fiscal 2023
(compared to last 5 years) (Rs ten billions)

Infrastructure capex, projected at Rs 88 trillion 0.69

162
over the next 5 years, presents a huge financing
opportunity. While traditional sources such as 1
government funding and financing from financial 1.03
institutions will continue to play an active role,
1.14 1.18
newer funding sources such as bond markets and
infrastructure investment trusts (InvITs) are also 0.93
expected to contribute significantly in the coming
years. Additionally, green and sustainable financing
has picked up pace of late. Its momentum is only
likely to increase further, as India races to meet its 142
sustainability goals. 65
65
So far, the share of private sector in infrastructure
investments has been limited to 18-22% in last 3 61 75
years, due to skewed risk-sharing between private
and public entities. As a result, central and state
governments have done the heavy lifting in terms
of infrastructure growth and investment through
large budgetary allocations for the sector.

Government sources: Historically, both central

and state governments have played a near- equal
important role in funding infrastructure capital
57
expenditure (capex). This trend was especially
pronounced after the Covid-19 pandemic, when
they ramped up their spends to revive their
economies. The central government’s infrastructure
budgetary allocation more than tripled from 46
Rs 3 trillion in fiscal 2019 to Rs 10 trillion in fiscal
2024. Furthermore, the share of internal and extra
budgetary resources (IEBR) also reduced, implying
lesser reliance on market borrowings. This, along
with possible repayment of existing debt, augurs 36
32
well for the financial strength of implementing
bodies such as the National Highways Authority
of India (NHAI). Notably, NHAI has seen an
improvement in its debt-to-equity ratio from 1.18 in
fiscal 2021 to 0.69 in fiscal 2023.
(in Rs ten billions)

FY23RE

FY24BE
FY20

FY22
FY19

FY21

NHAI’s Budgetary Support NHAI’s IEBR

NHAI’s Debt to Equity (times)

Note: IEBR refers to the resources raised by Public sector undertakings

(PSUs) through debt and equity.
“NHAI - National Highways Authority of India
Source: NHAI, CRISIL MI&A Research

12
Reduction in IEBR has supported the Ministry Central government’s tax receipts have grown 51%
of Railways’ financial profile too by reducing its over fiscals 2020 to 2023
dependence on external sources
FY24BE 54% 46% 34
(Rs trillion) FY24BE 2.4 0.5 2.9 (Rs trillion)

FY23RE 54% 46% 27

1.6 1.0 2.6
FY23RE
FY22A 52% 48% 27

FY22 1.2 0.7 1.9

FY21A 53% 47% 20

0.3 1.3 1.6 Direct Tax

FY21
FY20A 52% 48% 20.11
GBS Indirect Tax

FY20 0.7 0.8 1.5 IEBR

NOTE: A-Actuals; RE-Revised estimated; BE-Budgeted estimate
Source: Ministry of Railways, CRISIL MI&A Research Source: CBDT, budget documents, CRISIL MI&A Research

The state’s budgetary outlay on infrastructure has Financial institutions: Banks and NBFCs have also
logged a CAGR of 9%, rising from Rs 3,020 billion in played an important role in infrastructure financing
fiscal 2019 to Rs 4,234 billion in fiscal 2024. over the years, with ~20% of total funding in this
space coming from these sources. Despite limited
The high funding by central and state governments
private participation, the infrastructure loan books
is supported by increasing tax and revenue receipts.
of both banks and NBFCs have swelled, as these
This would provide the government the financial
institutions have financed projects in sectors such
buffer to undertake aggressive infrastructure capital
as power, railways and roads. Public sector NBFCs
expenditure going forward, too.
such as Power Finance Corporation (PFC), Rural
Electrification Corporation Limited (REC) and Indian
Railway Finance Corporation (IRFC) have played a
key role, consistently disbursing substantial amounts
to finance projects in power and railway sectors.

Railways and power sector have seen high disbursements from infrastructure financing NBFCs

Disbursement split of top 3 infrastructure finance companies

2% 14%
4% 2% 1% 0%

23% 28% 34% 37%

34% 15%
3%
4% 8%
3% 1% 2%
27%
33% 24% 32%
37% 32%
7%
6%
7% 4%
7%
35% 3%
26% 32%
21% 22% 28%

FY18 FY19 FY20 FY21 FY22 FY23

Generation Transmission Distribution Renewable Railways Others

Note: Top 3 infrastructure finance companies include PFC, REC and IRFC; ‘Others’ include short-term loans
Source: Company reports, CRISIL MI&A Research

13
Market Intelligence
& Analytics

Consequently, the share of infra focused NBFCs in from 46% in fiscal 2018 to 54% in fiscal 2023 and is
total outstanding infrastructure loan book increased likely to further go up to 56% this fiscal.

Infra focused NBFCs have been growing faster than banks

(Rs billion)

Share of Share of infra

banks focused NBFCs

FY18 54% 9,096 7,602 46%

FY19 55% 10,781 8,917 45%

FY20 52% 10,830 10,158 48%

FY21 48% 10,955 11,692 52%

FY22 49% 11,950 12,435 51%

FY23E 46% 11,862 13,865 54%

FY24F 44% 12,455 15,612 56%

Bank NBFC

Note: E-estimate; F-forecast

Source: Company reports, CRISIL MI&A Research

Furthermore, the gross non-performing assets have also shown a similar trend. This augurs well
(GNPA) level of NBFCs has improved significantly for the sector’s financing as NBFCs would be better
from 8.2% in fiscal 2018 to 3.6% in fiscal 2023, due to placed to extend credit to projects, alleviating the
resolution of stressed assets. The GNPAs of banks risk of funding crunch.

Infrastructure-focussed NBFCs have seen a stark Banks GNPAs are also at a historical low
improvement in their GNPA levels
11.30%
GNPA (%) 9.10% 8.50%
7.50%
5.90%
3.90%
8.20% 8.40%
7.10%
6.50%
4.90%
3.6% 3-4% FY18 FY19 FY20 FY21 FY22 FY23

Source: RBI, Company reports, CRISIL MI&A Research

FY18 FY19 FY20 FY21 FY22 FY23E FY24F

E- Estimated; F- Forecast
Source: RBI, Company reports, CRISIL MI&A Research

14
Furthermore, as indicated by the net debt-to-Ebitda one of its best levels since fiscal 2010, implying ample
(data pertains to financials of ~800 companies; room for players to undertake incremental debt for
barring BFSI and oil & gas), leverage of players is at infrastructure project execution.

Net debt-to-Ebitda fell to a decadal low in fiscal 2022

in Rs trillion

25 25000000

3.5
2.8 2.8 2.9 2.8
2.6 2.6 2.6 3.0
20 20000000 2.5
2.3
2.1 2.5
15 1.8 1.8
1.6 2.0
15000000

1.6

10 10000000
1.5

1.0
5 5000000

0.5
0 0

2018-19
2009-10

2013-14

2016-17
2015-16

2021-22
2012-13

2020-21
2014-15
2010-11

2011-12

2017-18

2022-23*
2019-20
Long term debt Short term debt Net debt to EBITDA

Note: Data pertains to financials of ~800 companies (barring BFSI and oil & gas)
Source: CRISIL MI&A Research

In addition, the government has announced the investments for infrastructure projects located
creation of a new development financial institution entirely or partly in India.
(DFI) to ease fund flow for infrastructure projects.
Other sources: Apart from the traditional ones,
The National Bank of Financing Infrastructure
other funding sources have also started to gain
and Development (NaBFID) has been set up as a
traction. These include issuance of non-convertible
corporate body with an authorised share capital of Rs
debentures (NCDs), raising of equity, internal
1 trillion, to directly or indirectly lend, invest or attract
accruals, and foreign direct investment (FDI).

Other funding sources to play a key role in infrastructure financing

Non-Convertible Debentures (NCD) Equity & Internal Accruals Foreign Direct Investment (FDI)

• Despite underpenetrated bond • Growing order books and timely • India’s strong fundamentals and
market, multiple entities have execution of projects have boosted promising economic prospects has
issued NCDs to raise capital for infra the cash accruals of many infra resulted in the infra sector seeing
projects. players. strong FDI inflows in recent times.
• Improved financial profiles, have
• This includes private players as well • In 2022, international project
also enabled players to raise equity
as government entities such as finance deals increased by 64%,
for funding projects.
NHAI and NTPC. making India the recipient of
• This aids funding in sectors such as
the 2nd largest number of
• Yet the share of NCDs in roads, where the promoter typically
international project finance deals
infrastructure funding remains well undertakes equity infusion of 15-
20% of the total project cost in HAM globally behind only the USA.
below 10%.
projects.
• Given promising economic outlook
• Nonetheless, the significance of • With increasing profitability, and robust infrastructure capital
NCDs is likely to rise with further players’ reliance on these sources expenditure, FDI inflows is likely to
bond market penetration for funding is likely to rise.
remain strong going forward.

Source: CRISIL MI&A Research

15
Market Intelligence
& Analytics

Given all of the above, the total infrastructure growth potential, the government sector is still likely
financing opportunity in India is expected to to be the largest source, owing to its high budgetary
increase from Rs 34-36 billion in fiscals 2021-23 to outlays. We estimate its share is likely to rise from
Rs 52-54 billion in fiscals 2024-26, implying a jump 55-60% to 60-65%.
of ~51%. While all segments of financing have good

Infra financing opportunity to grow 1.5x in fiscals 2024-26 over previous three years

Government Government
55-60% Total infra 60-65%

investments
1.5X
FY2024-26E
FY2021-23E
Rs 52-54
Rs 34-36
billion
billion
Sources of Funds Financial
Financial Institutions
Institutions 10-15%
15-20% Government’s Financial institutions, Other sources
share in spends led by NBFCs, of infrastructure
to rise further will continue to financing such as
due to higher play a pivotal role internal accruals
Others budgeted outlay in infrastructure and NCDs to Others
20-30%
financing remain firm 20-30%

Source: Budget documents, company reports, CRISIL MI&A Research

A significant portion of this financing would be benefits such as:

towards renewable energy (RE) projects. Green
l Lower capital cost than domestic bank loans,
bonds have rapidly become an attractive option for
including hedging costs.
such projects, though it is still in a nascent stages in
India. l Fixed rate of financing as opposed to floating rate
of project loans.
Green bonds support RE projects by providing
wider access to domestic, foreign capital l Diversification of debt profile and refinancing of
existing bank debt.
According to the World Bank, total Indian green
bond issuances were $21 billion as of February 2023, l Freeing up of bank credit for utilisation later/
with the private sector accounting for 84% of total elsewhere.
issuances. Players such as Greenko, ReNew and
Continuum have played an especially active role in Infrastructure focused NBFCs, too, have raised
the same. funds through green bonds

While the private sector has done the heavy lifting so Since 2017, India’s leading infrastructure-focussed
far in this space, recently, Indian government entities NBFCs — PFC, REC and IRFC — have raised funds
have also started issuing green bonds. Notably, by issuing green bonds. Typically, these bonds have
India raised ~$2 billion (Rs 160 billion) in fiscal 2023 been denominated in foreign currencies and have
through its first ever sovereign green bond issuance. also been listed on overseas bourses. Furthermore,
most of these green bonds issued have a tenure of 10
As India makes strides towards its sustainability years. However, recently, green bonds with a tenure
targets, the green bonds market is set to grow. This of 5 years have also been issued.
would be further supported by some of its inherent

16
 Green bond holdings of PFC and REC
Leading infrastructure-focussed NBFCs have
tapped the green bonds market NBFC Utilisation of green bonds Share of green
bonds in foreign
currency notes/
bonds

$750 mn PFC Financing of RE projects 16%

Financing solar, wind
5.63%
and renewable purchase
April 2023
India INX, NSC IFSC
REC obligations (RPO), including 10%
refinancing of eligible
projects

Source: Company reports, CRISIL MI&A Research

The issuance of green bonds has coincided with the

$500 mn
increase in share of foreign currency loans in the
borrowing mix, which has gone up from 8% in fiscal
3.57% 2017 to 17% in fiscal 2023. The share of term loans
January 2022
have gone up from 1% in fiscal 2017 to 18% in fiscal
India INX, NSC IFSC 2023.

Share of foreign currency loans and ECBs on the

rise in the borrowing mix of NBFCs
Euro 300 mn
1.84%
September 2021 FY17
Singapore stock exchange,
India INX, NSE IFSC 91%

8%

$400 mn 1%
1%

3.75% 2%
December 2017 London stock exchange,
Singapore stock exchange
19%

62%
FY23 17%

$450 mn

3.88% Bonds NCDs Foreign currency loans, ECBs

July 2017 London stock exchange,

Singapore stock exchange
Term loans Others

Note: Data is not exhaustive and includes the top two NBFCs; ECB:
amount raised coupon rate exchanges listed on external commercial borrowings
Source: Company reports, CRISIL MI&A Research Source: Company reports, CRISIL MI&A Research

17
Market Intelligence
& Analytics

Asset monetisation to support can prop up the government’s funding ability.

funding with large quantum of A Rs 6 trillion ($ 75 billion) asset monetisation
monetisable assets blueprint, the National Monetisation Pipeline (NMP),
was drawn up to create revenue sources from
While the infrastructure financing opportunity is unutilised or under-utilised public assets. Sectors
sizeable, a large portion of it would continue to be such as mining, power and roads have witnessed
through government sources. That said, despite successful cases of monetisation over the past few
rising revenue and tax receipts, the government’s years, while those such as railways are yet to catch
ability to fund infrastructure capex would remain up. Overall, execution of asset monetisation has been
a critical factor. Against this backdrop, asset patchy so far, with stark variations across sectors.
monetisation could assume a significant role as it

Asset monetisation execution patchy last fiscal but may aid capitalisation overall

Sector FY22 Achievement FY23 Achievement Overall YTD achievement in

monetization monetization target overall NMP targets
(Rs bn) (Rs bn) (Rs bn)
Roads 230 77% 161 49% 1602 24%

Railways 8 4% 18 3% 1525 2%

Power 95 125% 160 105% 850 30%

Mining 580 17.26x 600 2.81x 287 4.11x

913 939 4264 38%

Note: Data is updated as of March 2023

Source: Industry, CRISIL MI&A Research

While still nascent, InvITs have fast become the for capital gains as well as steady cash flows over
preferred investment vehicle for monetisation of long periods of time. Given the favourable risk-return
assets. InvITs are quasi-equity which amalgamate the profile of the asset class, it has appealed to domestic
benefits of debt and equity, providing opportunities and international investors, alike.

InvITs in India have seen a sharp growth in AUM

(Rs ten billions)

13
31
77
FY18 305
FY19
351
FY20
367
FY21
FY22
FY23

18
 Despite mixed success so far, the sheer quantum
Newer sectors are being ecompassed by InvITs of monetisable infrastructure assets translates to a
huge potential for asset monetisation. Private players
too have explored the option of InvITs for monetising
assets to deleverage their balance sheets and free
2 up cash flows to meet equity commitments in HAM
projects, or execute other projects. In this regard,
1 1 roads and renewable sectors present a sizeable
opportunity. This is significant as these two sectors
1 1 together account for 44% of the NMP targets.

1 1 2
Roads and renewables present massive
1 4 10
monetisation potential for top private players
FY18 FY20 FY23
Roads Renewable
Roads Transmission Energy
Renewable Pipeline
Order book of
Telecom towers and fibre
top 10 players 2.82 2.40
(Rs trillion)
Note: Numbers in box represent total active InvITs in respective fiscal
Monetization
potential of top 10 0.56 2.49
The NHAI successfully launched its own InvIT in fiscal players (Rs trillion)
2022 and raised Rs 109.41 billion by end-fiscal 2023.
It aims to raise another Rs 80-120 billion this fiscal. Order book to
Contrarily, some toll-operate-transfer (TOT) bids, monetization 5.0 1.04
another mode of monetisation of road assets, have potential
seen mixed success. While some TOT bundles have
witnessed healthy participation others have been
lacklustre, leading to their cancellation.
Top 10 private
players share

NHAI InvIT has gained good traction so far 79%

35%

NHAI Invit launched

FY22 5 road assets
Rs 80.11 billion raised
(EV)
Share of private
players

tranche II
47%

85%

Rs 14.30 billion raised

(EV) for 3 assets
NCD Issuance of
Rs 15 billion

FY23
Share in
infra capex
tranch III

To raise Rs 80-120 billion

9%
27%

(EV) for 6 assets

Source: NHAI, CRISIL MI&A Research Source: Company reports, CRISIL MI&A Research

19
Market Intelligence
& Analytics

Private investments
will boost infrastructure
investment cycle
Private sector investments accelerated from fiscal 2017, particularly for the
construction of roads and bridges. Banks and financial institutes provided
substantial support, amounting to Rs 2.67 trillion. In comparison to previous period
an increase in investments of 80% is observed in road sector. Improved energy
efficiency and less losses are achieved through the use of sophisticated metering
infrastructure. India’s energy infrastructure is being strengthened and renewable
sources are being integrated through initiatives like the Revamped Distribution
Sector Scheme and the Green Energy Corridor.

Private investments will boost infrastructure investment cycle

Following a prolonged period of sluggish Last fiscal, banks and financial institutions (FIs)
investments during fiscals 2013 - 2016 the capex extended support to 547 projects, valued at Rs 2.67
cycle picked up pace between fiscals 2017 and 2020, trillion. This is a significant departure from fiscal
particularly by the private sector. In fiscal year 2021, 2022, when 401 projects valued at Rs 1.42 trillion
once again investments experienced a decrease received similar backing.
due to the impact of the pandemic. However,
starting from fiscal 2022, there has been a noticeable
resurgence in private sector investments within this
industry.

Project sanctioned by banks and financial institutes (FI) have witnessed a decadal high in fiscal 2023

3.00
2.67
2.50

2.00 1.79 1.76

1.68 1.59
1.42
1.50 1.27
0.87 0.92
1.00 0.76

0.50

0.00
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23

Source: RBI, CRISIL MI&A Research

Of the total projects, the infrastructure sector and bridges, largely bolstered by the Bharatmala
accounted for a substantial 60% share, led by roads initiative.

20
Private capex sanctioned by banks and FIs have seen a higher investments towards roads & bridges in fiscal 2023

13 (9.8%) 8.8 (6.6%) Rs billion

28.7 (20.2%) 5.9 (4.2%)

2014-21
Metals & metal 38.9 (14.6%)
Roads & Bridges 97.4 (36.5%)
products 2021-22

51.8 (38.9%) 2022-23

8.2 (6.2%)
41.2 (29%)
10.5 (7.4%)
54.2 (20.3%)
Power Construction 10.7 (4.0%)

Note – The figures enclosed in parentheses () represent the percentage of the total private capital expenditure sanctioned by banks and financial
institutions (FIs) for the specified time period. Additionally, for the time frame spanning 2014 to 2021, the private capital expenditure is calculated as the
average annual private capex over that period
Source: RBI, CRISIL MI&A Research

Investments in roads and railways to almost double over next 5 years

Projections indicate a significant 80% increase in

Road capex to increase 1.8x in medium term, led capex in the roads sector between fiscals 2024-28
by national/state highway construction and fiscals 2019-23, surpassing the Rs 20 trillion mark.
Funding sources are expected to include the central
(Rs trillion) government (60-65%), state governments (25-30%)
1.8x and the private sector (10-15%).
~20.0
~13.3

FY19-23A FY24P-28P

Source: CRISIL MI&A Research

Pace of road construction to continue at steady pace

(thousand Km)

13.3 11.2

10.3
10.2 10.5

3.2
(YTD)

FY 20 FY 21 FY 22 FY 23 FY 24 (YTD)

Note – The data indicates total annual construction of National Highway in 000’ kms
Source: MoRTH, CRISIL MI&A Research

Road construction is progressing steadily and construction rate of 28 km per day to 50 km per day
is expected to return to the fiscal 2021 levels. soon.
The government aims to increase the current

21
Market Intelligence
& Analytics

Shift in model has helped hedge project risks in roads sector

HAM (Hybrid Annuity Model):
EPC (Engineering, BOT (Build-Operate-Transfer):
Government provides 40% grant,
Procurement, and Private entity builds, operates,
developer arranges 60% funding;
Construction): Government and maintains project; transfers
shared construction and maintenance
handles the entire project ownership to government
responsibilities. Partial grant from
process, from design to after concession period. Private
government; developer funds the rest,
construction. Government fully investment, revenue from tolls;
shares revenue and traffic risks with
funds the project; bears risks of private entity bears construction,
the government
delays and cost overruns. operation, and revenue risks.

The shift in the roads sector model from built- execution and boosted implementation. Table below
operate-toll (BOT) to hybrid annuity model (HAM) reflects the transformation in execution due to the
has helped hedge multiple risks associated with model shift.

Discipline of HAM have over come the risks of BOT projects

Ills of the past Discipline of the present

Land acquisition and approval challenges Land acquisition and approval challenges
EPC players between

between FY18 and FY22

Stuck /delayed projects Appointed dates linked to ROW availability

(BOT projects)
FY10 and FY15

Substantial cost overruns

(HAM projects)

Option of de-linking /descoping

EPC players

High equity commitments in BOT

projects leading to high leverage Inflation-linked payment receipts
Traffic risk Low equity commitment in HAM –
40% funding by the authority
Aggressive bidding (highly
leveraged balance sheets) No traffic risk in HAM – 60% project cost paid as annuities
Limited means to monetise assets Aggressive bidding (lean balance sheets)

Monetisation platforms like InvITs available

Policy changes to mitigate risks further

Government measures to address competition

Operation and maintenance (O&M) bids removed as award criteria. Norms made similar to engineering,
procurement, and construction (EPC) bids
Additional performance security for abnormally low bids below 20% bid discount
Adjustment made in net worth calculation by deducting the balance equity commitment in projects
A minimum credit rating requirement of ‘BBB’ for bidders. If the rating is below this threshold, a comfort
letter is needed from banks/financial institutions

Railway capex to almost double in medium term

Projections indicate a substantial 90% increase in capex Capex in railways to be led by high-speed rail and
for the railway sector, from ~Rs 3.9 trillion between station redevelopment
fiscals 2019 and 2023 to ~Rs 7.5 trillion between fiscals
2024 and 2028. The central government is expected (Rs trillion)
to finance 80-85% of this expenditure, emphasising
its commitment to upgrading railway infrastructure
1.9x
and connectivity. The private sector is expected to
contribute 15-20%, showcasing the potential for public-
private partnerships (PPPs) and private investment in ~7.5
~3.9
the development of India’s railway sector.

Full operationalisation of the dedicated freight corridors

in June 2024 will drive investments in the Indian FY19-23A FY24P-28P

railways sector over the next five years, with total

opportunity projected at ~Rs 1.25 trillion. Source: CRISIL MI&A Research

22
Dedicated freight corridor (DFC) have a total opportunity of Rs 1.24 trillion

Land acquisition Commissioned length: Financial Progress

EDFC: 100% ^ EDFC: 100% EDFC: 86%
WDFC: 100% ^ WDFC - 52% WDFC: 92%
PPP: 99%^

Progress of works: Target completion date

Track linking - ~99% (in phases)
OHE wiring - ~ 83% June 2024

^ As of September 2023
Note: EDFC - Eastern dedicated freight corridor
WDFC - Western dedicated freight corridor
PPP - Public private partnership

CRISIL MI&A Research

High-speed rail projects are becoming attractive of the needed land, paving the way for accelerated
opportunities in the infrastructure sector. The construction. Other high-speed rail projects are in
Mumbai-Ahmedabad High-Speed Rail project, the detailed project report (DPR) preparation stage,
initially challenged by land acquisition issues, has indicating a growing focus on advancing such
made significant progress by securing nearly 99.5% projects in the near future.

High-speed rail to have opportunity for infrastructure players

DPR
preparation:

Mumbai–Ahmedabad High
Speed Rail Corridor (MAHSRC)
Varanasi- Howrah
Mumbai - Hyderabad
Delhi –Amritsar
Delhi - Varanasi
Delhi-Ahmedabad Under-construction
Mumbai - Nagpur
Chennai-Mysore

Source - CRISIL MI&A Research

The Amrit Bharat Station Scheme is also gaining these with improved and contemporary amenities
prominence as a prospect for stakeholders in for passengers. The comprehensive redevelopment
the infrastructure sector. This initiative entails potential for these stations is projected at
revitalisation of over 1,300 railway stations, enhancing ~Rs 250 billion.

23
Market Intelligence
& Analytics

Power demand growth pegged at ~6% until fiscal 2030, open multiple
opportunities for private players
Private investments in India’s power sector have India’s power demand and GDP growth have shown
been instrumental in addressing the country’s a strong correlation of 0.93. Between fiscals 2002 and
energy needs, particularly in power generation 2009, power demand increased at an average rate of
and renewable energy. The sector offers ample 5.5% and GDP grew 6.8%. Between fiscals 2009 and
opportunities for both domestic and foreign 2016, these figures were 5.3% and 7.1%, respectively.
investors as India aims to modernize and expand its However, between fiscals 2016 and 2023, both power
energy infrastructure. demand and GDP growth softened to 4.5% and 5.1%,
respectively, because of the pandemic.

BU
On average, power demand has remained nearly 1% lower than GDP
2,500 15.0%
BU
10% 9.6%
2,000 10.0%
2,500 7% 15.0%

1,500 10% 9.6% 5.0%

2,000 10.0%
7%

1,000 0.0%
1,500 -1.2% 5.0%

500 -5.0%
1,000 0.0%
-1.2%
-8%
-
500 -10.0%
-5.0%
FY95
FY96
FY97
FY98
FY99

FY01

FY30F
FY00

FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09

FY24F

FY26F

FY29F
FY11
FY10

FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

FY21
FY20

FY22

FY25F

FY28F
FY27F
-8% FY23
- -10.0%
FY95
FY96
FY97
FY98
FY99

FY01

FY05

FY30F
FY00

FY02
FY03
FY04

FY06
FY07
FY08
FY09

FY24F

FY26F

FY29F
FY11
FY10

FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19

FY21
FY20

FY22

FY25F

FY28F
FY27F
FY23

Power demand Power demand (y-o-y, %) GDP(y-o-y, %) 25-year average demand

Source: World Economic

PowerForum,
demandCEA, CRISIL MI&APower
Research, BP statistics
demand (y-o-y, %) GDP(y-o-y, %) 25-year average demand

India’s power intensity, a measure of power used to efficiency. The US showed a similar trend, while
generate GDP, decreased from 0.18 kWh/$ in 2000 China and Indonesia experienced slower decline due
to 0.14 kWh/$ in 2020, reflecting improved energy to higher manufacturing and mining activities.

India’s power demand per capita is significantly lower than developed countries,
implying room for growth in future
100,000
Power demand per capita ( kWh

80,000 US
Australia
Russia
60,000
per person)

Spain
40,000
Indonesia
China Germany
20,000 Malaysia UK
Italy
Brazil
India
-
- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

GDP per capita ($ per person)

Note: Size of the bubble denotes power demand in respective countries

Source: World Economic Forum, CEA, CRISIL MI&A Research, BP Statistical Review

24
 India’s power intensity to fall with increase in GDP per capita

GDP per capita PPP

(USD per person) (kWh/$)

14000 0.25

12000 0.19
0.17 12888 0.20
0.17
10000 0.15 9773
0.13
8000 0.12 0.15

6000 0.10
6518
4000
4828
0.05
2000
2460
1911
0 1105 0.00

2011
2010

2012
2013
2014
2015
2016
2017
2018
2019

2021
2020

2022
2023
2024
2025
2026
2027
2028
1991
1990

1992
1993
1994
1995
1996
1997
1998
1999

2001

2005
2000

2002
2003
2004

2006
2007
2008
2009

GDP per capita PPP Power intensity

Source: World Economic Forum, CEA, CRISIL MI&A Research, BP Statistical Review

Role of advanced metering infrastructure in reducing losses

The main objective of advanced metering distribution companies’ (discoms) financial

infrastructure is to establish two-way conditions.
communication between smart energy meters and
Current aggregate technical and commercial (AT&C)
a central system. This enables capabilities such as
losses in India have improved in last few years. AT&C
time-of-day tariffs, encouraging electricity usage
losses currently are at 16.4% in fiscal 2022, this was at
during off-peak hours to improve grid efficiency
22.32% and 23.72% in year 2022 & 2017 respectively.
and security. Prepaid meters, another component,
The government has approved the installation of
promote bill payment before consumption,
229.9 million smart meters, with over 55 million
mitigating non-payment issues and strengthening
already awarded for deployment.

Uttar pradesh and Tamil Nadu are leading in smart meter installation

35
Bihar
Uttar Pradesh
30

25
AT&C losses (in %)

20 Rajasthan
Maharashtra
15 Tamil Nadu
Karnataka
Andhra Pradesh Gujarat
10
Telangana
5

0
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Number of sanctioned smart meter installation (in ‘000)

Green: 20% or less residential consumers; yellow: more than 20% but less than 40% residential; red: More than 40% residential consumers
Source: Company reports, CRISIL MI&A Research

25
Market Intelligence
& Analytics

Focus on T&D to strengthen grid energy efficiency, RE integration to support

The central government is implementing two key GEC, implemented in two phases, focuses on
initiatives to strengthen the energy system, integrate increasing evacuation and transformation capacity
RE sources and reduce losses: Green Energy near RE sites to distribute RE power across the
Corridor (GEC) at the transmission level and the country.
Revamped Distribution Sector Scheme (RDSS) at the
The RDSS aims to reduce losses at the distribution
distribution level.
level, enhance discoms’ financial strength, and
In the transmission sector, the government plans to modernise the existing infrastructure, with smart
add 16.6k circuit km of transmission lines and 78k meters as a central component. The scheme has
megavolt-ampere of transformation capacity this a projected outlay of Rs 3 trillion, and the central
fiscal to support the growing adoption of non-fossil government is expected to provide ~Rs 0.97 trillion.
energy and the target of 500 GW of RE by fiscal 2030. It aims to reduce AT&C losses from 16.44% in fiscal
Investments of ~Rs 2.9 trillion are expected in the 2022 to 12-15% in 2025 at the pan-India level. These
transmission sector between fiscals 2024 and 2029, initiatives are vital for integrating RE sources
with contributions from the central, state and private and enhancing the efficiency of India’s energy
sectors. infrastructure.

Projected investments in T&D till fiscal 2029

(Rs Billion)

800
694 701
664 674 688
700
627
600
514 549
476 489
500 462

375
400

300

200

100
0
FY 24 FY25 FY 26 FY 27 FY 28 FY 29

Distribution Transmission
Source: CRISIL MI&A Research

RE share in total capacity to grow 4x over fiscal 2023-30

l India’s commitments made at COP 26 and COP 27 l To address the intermittency challenges
include reducing the emission intensity of its GDP associated with renewables, there will be a focus
by 45% from the fiscal 2005 level, achieving 50% on integrating storage elements such as pumped
of its cumulative electric power installed capacity storage plants (PSP) and battery energy storage
from non-fossil-based energy by fiscal 2030, and systems (BESS), as well as deploying hybrid
reaching Net Zero emissions by fiscal 2070. systems, round-the-clock (RTC) and peak power
supply solutions.
l Between fiscals 2023 and 2030, India’s total
installed capacity is expected to grow significantly l Although non-fossil fuel sources will see substantial
from 416 GW to 748 GW, with non-fossil fuel growth in installed capacity, their share in the
sources constituting ~90% of the additional generation mix will increase more slowly due to
capacity. lower capacity utilisation factors (CUF) of renewable
sources. Despite growth of non-fossil sources, fossil
l RE capacity, excluding hydro, is projected to reach
fuels will continue to be a prominent power source,
52% of the total installed capacity by fiscal 2030.
accounting for 55% of the generation mix by fiscal
Solar and wind energy will make up majority of
2030, with coal plants maintaining load factor
these additions.
above 60% to meet rising demand.

26
Energy storage installed capacity to reach 50 GW by fiscal 2030 to support renewable sources

RE and storage to dominate capacity addition Driven by robust additions, solar to account for the
until fiscal 2030 largest share in energy among RE technologies
748
50

2% 13% 3%

8% 2% 13% 4%
1% 14% 2%
1%

1% 14% 2%
1% 14% 1%
585 91

14%
16%
29

15%

14%

1% 15%
14%

14%

16%
15%
20
83 89

4%
446

4%

5%
4%
5%

5%

5%
5%
4%

6%
5%

6%
416

7%
12

1%

2%

3%
370 64

4%
4%

5%

6%
6%
74

8%
327

10%
66 4 222

12%
64 2 45

14%
42 148

17%

18%
61 38 65 73
32 35
12

231 237 245 258 267

218

80%

80%

74%
78%

69%

58%
65%

62%
75%

75%

75%

75%

55%
71%
FY17 FY20 FY23 FY24E FY27P FY30P

FY17

FY18

FY19

FY24P

FY27P
FY26P

FY28P

FY29P
FY25P

FY30P
FY20

FY21

FY22

FY23
Thermal Solar Wind
Mixed resource Other non-fossil Storage Thermal Solar Wind
Source: CRISIL MI&A Research Mixed resource Other non-fossil Storage

Hedging of risks through contractual measures and agreements has encouraged

private sector participation
Strengths: Further policy interventions can help speed up private investments

l Payment security mechanisms, such Coal • Mandatory coal washing for power plants and reinstating ash content
as tripartite agreements, improve restrictions, alongside financial incentives for using washed coal, can
credit ratings for renewable energy enhance Indian coal quality and adoption in the power sector.
projects by enhancing payment • Encouraging rail and conveyor belt transport, with additional railway
lines and the First Mile Connectivity (FMC) initiative, is vital for reducing
certainty from state discoms; Solar road transportation in mining areas and improving mechanized coal
Energy Corporation of India (SECI) transport.
rating increased from AA- to AA+
Energy • The government should offer initial financial support for battery storage
after becoming a beneficiary in 2017,
storage plant installation to kickstart sector investment, exemplified by the
reducing risk premiums and lowering recent announcement of Rs 37.6 billion for 4 MWh of battery storage
lending rates for such projects BESS projects.
• India should prioritize building domestic capacity for battery raw
l Introduction of a payment security material processing and establish strategic partnerships with resource-
fund has served as a capital reserve, rich nations to address supply chain vulnerabilities.

offering interest-free capital to its Smart • Discoms should gradually phase out paper bills while continuing to
beneficiaries in the event of payment meters provide them for the time being.
defaults by any discom, usually • Discoms must ensure timely notifications and a seamless recharge
amounting to three months of energy process for prepaid customers.
• Discoms should assist consumers in utilizing the payment flexibility
sale payments to the discom
feature offered by prepaid meters.

l During a raw material upcycle,

Renewable • The VGF scheme until 2030 aims to facilitate private investment in
variable costs increase for energy capital-intensive floating solar projects, reducing reliance on land,
conventional fuels, and if the discom conserving water, and potentially mitigating tariff differentials for
rejects the power, the generator tender-issuing entities.
• The introduction of a VGF for offshore wind in India depends on
receives mandatory fixed charges
technological progress and could be supported by renewable purchase
obligations, similar to the Contract for Difference scheme and feed-in
l Deemed generation clauses ensure tariffs that boosted the sector in the UK and China.
payments to the generator when • Policies around uniformity in land acquisition is required to make solve
discoms curtail power for reasons the legal battles between land owners and developers.
other than grid security, highlighting • Renewable energy (RE) power projects face the risk of price upcycles.
Since power is purchased at a single-part tariff, there is less scope for
the obligation of discoms to pay
renegotiation of tariffs. Further, RE plants do not receive fixed charges
for the scheduled capacity of the even though a back-down is entirely arbitrary, illegal, and unjustified in
renewable energy project both facts and law

27
Market Intelligence
& Analytics

Emerging segments in India

for attractive investment
opportunities

Warehousing

Top 8 Indian cities to log 10-15% CAGR between fiscals 2024 and 2028

E-commerce, third-party logistics to drive up industrial warehousing demand in

next 5 years, aided by increased digital penetration

Demand for industrial warehousing is expected This fiscal, industrial warehousing demand is
to continue its growth trajectory. The segment expected to grow 5-10% owing to high-base effect
had bounced back strongly in fiscal 2022 after the and a slowdown in the e-commerce segment,
pandemic blow and logged steady growth the although demand from the third-party logistics (3PL)
following year. Growth in incremental demand segment is expected to be robust.
normalised in fiscal 2023, and there was net
Between fiscals 2024 and 2028, both annual demand
absorption of 38-43 million sq ft (msf) during the
and supply of Grade A and B warehouses in the top 8
year, mirroring the normalisation in growth rates
Indian cities are expected to log a compound annual
across end-user industries.
growth rate (CAGR) of 10-15%.

Industrial warehousing demand to remain flat in FY24

CAGR CAGR
FY19 FY20 FY21 FY22 FY23 FY24P FY28P
FY19-23E FY24-28P
70-75
Annual 40-45
35-40 38-43
Demand 30-35 20-25
30-35 5-10% 10-15%
(msf)
FY 19 FY 20 FY 21 FY 22 FY 23E FY 24F FY 28 F

70-75
Annual 43-48
Supply 28-32 38-42
25-29
34-38 36-41 5-10% 10-15%
(msf)
FY 19 FY 20 FY 21 FY 22 FY 23E FY 24F FY 28 F

Stock at 625-650
the end 166-170 210-214 270-280 310-320 360-375 15- 15-
236-240
of FY 20% 20%
(msf) FY 19 FY 20 FY 21 FY 22 FY 23E FY 24F FY 28 F

Source: CRISIL MI&A Research

l Demand from third-party logistics (3PL) has l As e-commerce companies aim for faster
increased as sectors such as electronics and white delivery of products, having warehousing
goods, retail, and fast-moving consumer goods spaces near major cities is paramount. The
(FMCG) are leveraging 3PL services. Moreover, e-commerce industry is poised for robust growth
large- and medium-scale manufacturing in the coming years, and its share in overall
companies are outsourcing a portion of their warehousing demand is expected to increase
inventory management to 3PL service providers significantly.
to optimise costs.

28
Annual warehousing demand led by e-commerce and 3PL, to contribute 55-60%.

FY20
36% 24% 10% 3% 8% 6% 13%

FY23
34% 27% 10% 6% 5% 6% 12%

FY24
38% 20% 9% 2% 10% 11% 10%

3PL e-Commerce Auto & comps FMCG Retail Consumer durable Others

Source: CRISIL MI&A Research

Advancements in technology, particularly warehousing. 3PL and e-commerce players have

automation, are pushing up the demand for end- gained a significant share in the occupied stock
to-end logistics services. As a result, the Indian over the past five years, and they are expected to
warehousing segment is witnessing a favourable be key drivers of future growth in the organised
structural shift with the rise in demand for modern warehousing sector.

Tech-led value-added services to help 3PL Mumbai and New Delhi account for ~60% of Grade
players gain further market share from captive A and B warehousing stock
warehouses over the long term.
700

600

Warehousing FY24E
Stock (msf) Rentals
(Rs. Per sf /
month)

105-125
500

Mumbai 20-26

10-11% 10-11%
400

9-10% 9-10% 9-10%

NCR 55-65 21-28

7-9%
300

Pune 20-30 25-30

200
9-10% Hyderabad 13-17 18-22

100
Kolkata 22-27 20-26

0
Bangalore 23-27 23-29

FY20 FY21 FY22 FY23E FY24F FY28F

Chennai 20-23 19-25
3PL Ecommerce Retail FMCG

Consumer durables Auto & comps Ahmedabad 14-19 16-21

Vacancy level

29
Market Intelligence
& Analytics

E-commerce and logistics companies leading the top 8 cities of India

New Delhi Kolkata

Bangalore

Ahmedabad

Mumbai Hyderabad

Chennai

Pune

TVS logistics

Other rapidly emerging locations for warehousing

Ambala-Rajpura: Gateway Jaipur, Vadodara & Indore: Guwahati, Lucknow, Vizag & Kochi: close
to Punjab and serves key Tier 1 consumption centres Siliguri, Bhubaneshwar: proximity to ports and
markets in Punjab & J&K. for the e-commerce as Serve northern and eastern key highways: cater to
Also in close proximity well as manufacturing belts esp for the FMCG & both manufacturing and
to Chandigarh, Patiala, segments e-commerce markets FMCG/FMCD demand
Ludhiana & Zirakpur

30
There are several trends and themes in the warehousing sector, which are as follows

Warehouse Temperature
footprint to expand controlled solutions
in smaller cities for perishable
with the growth categories such as
of ecommerce for fruits, vegetables,
As major faster TAT. Players With restricted dairy, fish & meat Increased adoption
consumption such as Mahindra mobility, many first- to pharma and of technology and
centres/ cities has started short time customers others will gain automation with
faced longer, more term flex solutions experimented importance. Cold increased demand
serious lockdowns – in smaller markets with purchase storage market is for end-to-end
supply chains were for seasonal on e-commerce highly fragmented supply chain/ 3PL
disrupted though demand. channels during and unorganised. solutions would
points of sale the lockdown. further accentuate
were active. Going Many of these organised players’
forward, businesses customers are likely share.
are expected to to turn loyal due to
maintain slightly the convenience
higher levels of offered and
inventory than pre- become permanent
COVID times which customers even
would act as a after the pandemic
boost to warehouse ends. E-commerce
demand. players are aiming
to provide faster
deliveries and the
need of warehouses
for the same is of
utmost importance.

Higher production to augur well for agricultural warehousing demand

Prevailing high High demand for fodder During kharif last Production is expected
prices of wheat led to sharp price rise for year pulse production to be higher on year due
expected to drive maize, jowar and bajra during reduced drastically due to expected increase in
the acreage and FY23 which created positive to erratic monsoon. acreages on a low base
thus increase in sentiments for this crop. Therefore, this year the of last year. Yield also
production. This, coupled with uncertain production is expected expected to improve on
monsoon, is expected to be higher on lows of year as erratic monsoon
to increase acreage under previous year for last year led to lower
these crops driving the crops like red gram yields.
production growth. and black gram.

31
Market Intelligence
& Analytics

Data centres

Evolving digital landscape positions India as a data centre hub

The industry is expected to log a ~20% CAGR between fiscals 2024 and 2028, led by
robust investments by Indian and global players.
The Indian data centre industry is at an inflection supported by the Digital India initiative, and growth
point, driven by accelerated digitisation and of sectors such as e-commerce, banking, financial
rapid cloud adoption. As part of their digitisation services and insurance (BFSI), technology and media.
strategies, industries are shifting their IT The launch of 5G services is expected to boost the
infrastructure to the cloud to enhance user demand for data and storage capacities across
experience and reduce costs. The industry expanded sectors. Government norms on data localisation, and
at a CAGR of 19-21% between fiscals 2018 and 2022, digital initiatives will add to the buzz.
to reach ~$2.1 billion in fiscal 2022. This growth was

Internet of Things, cloud and big data analytics drive industry growth

($ billion)
4.0 27% 30%

3.5
25%
3.0 20% 18-20% 18-22% 15-20%
20%
2.5
15%
2.0 15%
11%
1.5
10%
1.0
2.3- 2.8- 3.5- 5%
0.5
1.0 1.3 1.4 1.7 2.1 2.5 3.0 3.7
0.0 0%
FY21E

FY24P
FY18

FY19

FY23P

FY25P
FY22P
FY20

Revenues Growth (Y-o-Y)

Source: Industry, CRISIL MI&A Research

Power capacity addition to support digital

Capacity to reach 970-990 MW by FY24 led by
revolution
investments from players across the globe
India currently hosts about 164 data centres across
nine cities. The total installed capacity was estimated 1200
to 550-570 MW for fiscal 2023. The challenges posed 970-990
1000 880-900
by the Covid-19 pandemic accelerated the need for
800
digital transformation across industries, making it a 550-570
MW

600
necessity rather than an option. This led to a surge 340-360 420-440
in demand for hybrid cloud models and colocation 400
services. The rise in data consumption increased 200
the demand for data storage, transforming the 0
data centre industry into a large and strategically FY20 FY21 FY22E FY23P FY24P
important segment.
32
Current installed capacity (MW) in selected key such as Mumbai, Chennai, Bengaluru, Hyderabad,
cities in India. Pune and Delhi. Mumbai accounts for ~50% of the
installed data centre capacity, benefitting from the
Cable landing stations and government incentives
presence of undersea cable landing stations, its
give Maharashtra an edge over other states.
proximity to corporate houses and well-distributed
In India, data centres are buoyant in major cities fibre connectivity.

Mumbai leading in data centers capacities in India with 400-450 MW in fiscal 2023

Installed
data centre
capacities
85-95 MW across India
in fiscal 2023
NCR
New Delhi

0-10 MW
400-450 MW
Kolkata
Mumbai
50-60 MW 35-45 MW
Pune Hyderabad
90-100MW
Chennai

70-80MW
Bengaluru

Source: Industry, CRISIL MI&A Research

33
Market Intelligence
& Analytics

Overview of key business models in the Indian data centre industry

Captive Colocation Hosting

Built-to-suit - consumer Subscription – consumer Pay-per-use - consumer pay

Business to design and customize a can rent space for servers for the servers and storage,
model data center facility to meet and other computing only while it is actually
its requirements hardware executing

Complete control over Capex savings due to direct No capex on IT hardware or

Pros choice of hardware, leasing of rack space software.
software and security
Hyper-scalability of infra,
No vendor lock-ins based on demand

High capex, along Capex on servers. Hiring Inability to deploy customised

Cons with maintenance and and training of staff solutions
security costs required to manage
systems

Key growth drivers and trends for the data centre The number of IoT devices is expected to reach ~75
industry in India million by fiscal 2025, and the big data analytics
market is anticipated to be worth $68 billion.
1. Data Protection Bill
Challenges faced by the industry
The central government’s data centre policy is
focused on infrastructure status for data centres, 1. Data privacy
improving the ease of doing business. Declaration
As data centres store sensitive and confidential client
of data centres under the Essential Services
data, data leaks or thefts could be extremely costly.
Maintenance Act, 1968, ensuring reliable power,
Thus, risk mitigation and ensuring cyber and physical
internet connectivity and business continuity.
protection of stored data are primary concerns for
2. Rising internet subscriber base every data centre.

With the launch of 5G services by telecom players, 2. Power management

users will get access to higher-quality content such
To reduce unplanned downtime in data centres,
as Full HD videos. Edge data centres will act as
proper planning, analysis of power requirements,
intermediaries between large volumes of data and
and implementation of a reliable power backup
data processing.
system are essential. Unplanned downtimes impact
3. Rising cloud adoption the reliability of a data centre.

Government initiatives to accelerate the delivery 3. Capacity planning

of e-services and partnerships with cloud service
To deliver optimal performance, a data centre
providers are driving increased cloud adoption
should be operating at its desired capacity. This
among enterprises. The Indian public cloud services
can be achieved through the use of data centre
market is estimated to have reached $5 billion in
infrastructure management (DCIM) tools, which
fiscal 2023.
can identify computational, storage and cooling
4. Big data and IoT requirements.

Analytics has been driving demand for more

bandwidth, and reliable and scalable data centres.

34
 Urban
infrastructure

Urban infrastructure spending Water supply & sanitation (WSS) investments to

account to ~75% of urban infrastructure spend in
to reach Rs 7.4 trillion over
the next 5 years
fiscals 2024-28
Rs 3.3 trillion ~Rs 7.4 trillion
More than double the amount 1%
16%
invested in the previous 7%
five years, driven by central 1%
30% 76%
government schemes. 7%
62%

Investments in urban infrastructure are FY19-FY23A FY24P-FY28P

expected to continue rising in the medium Others Metro Smart City WSS
term, led by increasing urbanisation; Source: CRISIL MI&A Research
government schemes such as Atal Mission
for Rejuvenation and Urban Transformation Investments in WSS to rise 200% over the next 5
(AMRUT), Swachh Bharat Mission, Clean fiscals lead by the centers focus on jal jeevan mission
Ganga and Jal Jeevan Mission; water 5.6 (Rs Trillion)

supply and sanitation (WSS) projects; and 2.9x

constructionand expansion of metro rail 2 2.7-
networks in major Indian cities.

Investments in urban infrastructure are

expected to rise 31-33% this fiscal, led
by investments in WSS projects under
schemes such as Swachh Bharat Mission, Jal FY19-23A FY24P-28P
Jeevan Mission and AMRUT; and deferred Source: CRISIL MI&A Research
investments in metro projects, a bulk of
Smart City investments to be more then double,
which were under implementation and have
attributable to delayed investments and boosted
achieved financial closure. This follows a
by utility during the pandemic
20-21% on-year rise in urban infrastructure
(Rs Trillion)
investments last fiscal, attributable to
increased investments in WSS projects, 0.56
2.9x
government focus on urban infrastructure, 0.2 2.7-
introduction of the Smart Cities Mission, and
rise in execution of metro projects across 27
cities.

FY19-23A FY24P-28P
Source: CRISIL MI&A Research

1. Jal Jeevan Mission drinking water by 2024, achieved through individual

tap connections. Disbursements under the scheme
The Jal Jeevan Mission aims to ensure every rural
by the central government in Rs billion are as below:
household in India has access to safe and sufficient

FY19 FY20 FY21 FY22 FY23 FY24

54.58 100.30 109.98 400.30 548.08 696.84

(Rs billion)

35
Market Intelligence
& Analytics

2. Namami Gange Programme l River front development

It is an integrated conservation mission l River surface cleaning

approved as a ‘flagship programme’ by the
l Industrial effluent monitoring
Union Government in June 2014. With a budget
outlay of Rs 20,000 crore, the programme aims l Afforestation
to accomplish the twin objectives of effective
abatement of pollution, and conservation and l Improving biodiversity
rejuvenation of national river the Ganga. The other
l Increasing public awareness
key objectives of the programme include:
Disbursements under the programme by the
l Building robust sewage treatment infrastructure
central government in Rs billion are as below:

FY19 FY20 FY21 FY22

(Rs billion) 23.08 15.53 13.00 5.75

3. Swachh Bharat Mission and liquid waste management facilities accessible,

the mission is transitioning to its Phase II, known as
Swachh Bharat Mission was launched by the Prime
ODF-Plus.
Minister of India on October 2, 2014, with the aim of
accelerating efforts to achieve universal sanitation Disbursements under the scheme by the central
coverage and highlighting the importance of government have seen 44% growth in fiscal 24 (year-
sanitation. To achieve sustained open-defecation- on-year)
free behaviours, ensure inclusivity, and make solid

FY19 FY20 FY21 FY22 FY23 FY24

129.12 82.13 49.45 30.99 50.00 71.92

(Rs billion)

4. AMRUT 5. Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)

AMRUT was launched on June 25, 2015, in 500 The primary goal of PMKSY is to achieve convergence
selected cities and towns across India. The mission of investments in irrigation at the field level. This
aims to develop basic infrastructure in sectors such includes expanding the cultivable area under
as water supply, sewerage and septage management, assured irrigation, improving on-farm water use
stormwater drainage, green spaces and parks, and efficiency to minimise water wastage, promoting
non-motorised urban transport. The mission aims to the adoption of precision irrigation and other water-
make cities ‘water secure’ through projects related saving technologies (to achieve more crop per
to functional water tap connections, water source drop), increasing aquifer recharge, and introducing
conservation, rejuvenation of water bodies and wells, sustainable water conservation practices. The scheme
recycle/reuse of treated wastewater, and rainwater was launched by the Department of Agriculture &
harvesting. The total indicative outlay for AMRUT 2.0 Cooperation, Ministry of Agriculture, in January 2006,
is Rs 2.99 trillion, including a central share of Rs 767.6 as a centrally sponsored scheme on micro irrigation.
billion over five years.

36
Notes

37
Market Intelligence
& Analytics

About CRISIL Limited

CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets function better.
It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global
footprint.
It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from
India, the US, the UK, Argentina, Poland, China, Hong Kong, UAE and Singapore.
It is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and
commodity markets worldwide.

About CRISIL Market Intelligence & Analytics

CRISIL Market Intelligence & Analytics, a division of CRISIL, provides independent research, consulting, risk solutions, and data & analytics. Our
informed insights and opinions on the economy, industry, capital markets and companies drive impactful decisions for clients across diverse sectors
and geographies.
Our strong benchmarking capabilities, granular grasp of sectors, proprietary analytical frameworks and risk management solutions backed by deep
understanding of technology integration, make us the partner of choice for public & private organisations, multi-lateral agencies, investors and
governments for over three decades.

CRISIL Privacy Statement

CRISIL respects your privacy. We may use your personal information, such as your name, location, contact number and email id to fulfil your request,
service your account and to provide you with additional information from CRISIL. For further information on CRISIL’s privacy policy please visit www.
[Link]/privacy.

The below disclaimer(s) are issued by CRISIL Limited and Edelweiss Alternative Asset Advisors Limited respectively. These disclaimers should be read
in conjunction with each other and the text contained therein shall enure to the benefit of the two parties respectively.

CRISIL Disclaimer
This report is commissioned by Edelweiss Alternate Asset Advisors and prepared by CRISIL MI&A, a division of CRISIL Limited (“CRISIL”). By viewing,
using or accessing this Report you (“user”) agree and accept as follows: (i) While CRISIL uses reasonable care in preparing this Report based on the
information obtained from sources it considers reliable (“Data”), CRISIL does not guarantee the accuracy, adequacy, completeness, authenticity or
timeliness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of the Data / Report (ii) This
Report is not a recommendation or investment advice. CRISIL especially states that it has no financial liability whatsoever to the subscribers/ users/
transmitters/ distributors of this Report. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL
Ratings Limited, which may, in their regular operations, obtain information of a confidential nature. The views expressed in this Report are that of
CRISIL Research and not of CRISIL Ratings Limited; (iii) The user takes full responsibility for any use of the Report and CRISIL does not accept any
liability whatsoever (and expressly excludes all liability) arising from or relating to the use of any part of the Data/Report by the user; (iv) The user will
always use the Report ‘AS IS’ in its entirety and unless the user is specifically permitted by CRISIL in writing the user shall not in any manner: (a) copy,
transmit, combine with other information, recompile, publish, reproduce or segregate any part or portion of the Report. The contents of this report
are intellectual property and information of CRISIL. Altering or copying of the contents or distributing the report without attribution the source to
CRISIL is strictly prohibited and violation will attract legal action.; (b) use the CRISIL brand name, logo or any other CRISIL intellectual property rights
in relation to or in respect of the Report or in any manner that identifies or indicates that CRISIL is the author, developer, publisher or owner of the
Report or that CRISIL has released the Report. The report is for use within the jurisdiction of India only. Nothing in this report is to be construed
as CRISIL providing, or intending to provide, any services in other jurisdictions where CRISIL does not have the necessary permissions and/ or
registration to carry out its business activities. The user will be solely responsible for ensuring compliance for use of the report, or part thereof, outside
India.

About Edelweiss Alternatives

Edelweiss Alternatives is one of the leading alternative asset managers in India with over a decade of experience in managing investments across
private debt and real assets driven by the vision to “Be the trusted and respected India alternative asset advisor, creating value for all stakeholders.”

Edelweiss Alternatives focuses on identifying structural and scalable alternative investment opportunities in India to deliver superior risk-adjusted
returns for our customers and offers products that can be categorized into six distinct strategies: Special Situations, Performing Credit, Real Estate
Credit, Infrastructure Yield, Rental Yield and Climate.
Each of these strategies is managed by an on the ground dedicated investment team. The investment teams comprise 60+ investment professionals
who have deep domain expertise and experience, that help in sourcing and structuring bespoke transactions. The investment teams are supported
by a 100+ member asset management and operating teams who provide a “Beyond the Numbers” view and enhance the value of these investments.
At Edelweiss Alternatives, we continue to maintain the highest standards of governance and have a robust risk management framework to
ensure the long-term sustainability of the business. Each of the investments are evaluated pre-investment and monitored post investment by an
independent 15+ member risk management team.
The customers of Edelweiss Alternatives include global institutional investors - pension funds, insurance companies in North America, Europe
and Asia-Pacific as well as large family offices and ultra-high net worth individuals based in India. The business now caters to over 2,000 unique
customers with over 700 repeat investors across all our strategies. We are also the only Indian manager to feature in Private Debt Investors Top 100
global fund raisers for years 2021 and 2022.
Responsible Investment is one of the core focus areas at Edelweiss Alternatives, thus entwining ESG factors into the investment decision making
process. As a testament to our commitment, we became a signatory to the UN Principles for Responsible Investing (PRI) on January 1, 2023, and align
ourselves with the six principles for responsible investing.

38
Edelweiss Alternative Asset Advisors Disclaimer
This document has been prepared by CRISIL Limited and commissioned by Edelweiss Alternative Asset Advisors Limited (“EAAA”) and is only for
information purpose and may not be intended to be comprehensive or to provide specific investment advice or services. This document is not a
substitute for such professional advice or services and it should not be acted on or relied upon or used as a basis for any decision or action that may
affect you or your business. Any decision or action taken by you on the basis of the information contained herein is your responsibility and EAAA will
not be liable in any manner for the consequences of such decision or action. In deciding whether to make an investment with EAAA, you must rely
on your own evaluation of the terms of the proposed investment and the merits and risks involved, and, if applicable, upon receipt and careful review
of any confidential memorandum, prospectus or similar documents, and you should seek independent legal, tax, investment or other advice where
necessary. Although, reasonable efforts have been taken to ensure that the information provided in this document is correct, EAAA and its managers,
directors, officers, employees, advisers, representatives and agents make no representation and give no warranty that such information is accurate,
complete or current, and you should not rely on the information provided in this document for any purpose. EAAA does not accept any responsibility
whatsoever or liability for any direct, indirect or consequential loss or damage suffered or incurred by you or any other person or entity, however
caused, in any way in connection with the information provided in this document or the authenticity, accuracy or completeness of such information.
EAAA reserves the right to make modifications and alterations to this document if required. However, EAAAL is under no obligation to update or keep
the information current. Certain information contained in this document constitutes “forward-looking statements,” which can be identified by the
use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe,”
or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the
outcome may differ materially from those reflected or contemplated in such forward-looking statements. This document is for information purposes
only and does not constitute an offer or solicitation for the purchase or sale of any products / financial instrument/s or as an official confirmation of
any transaction/s involving EAAA. Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of
the date of preparation and not as of any future date. Opinions expressed are current opinions as of the date appearing in the material only. No part
of this material without written consent of EAAA be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person
that is not an employee, officer, director, and partners or authorized agent of the recipient. EAAA and any of its officers, partners, directors, personnel
and employees, shall not be liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, and
consequential, as also any loss of profit in any way arising from the use of this material in any manner. An investment in a financial instrument may
involves a high degree of risk (including the possible loss of a substantial part, or even the entire amount, of an investment) and potential conflicts of
interest that prospective investors should carefully consider any such offerings. The information contained herein is not intended to aid any person
in evaluating such risks and conflicts. There can be no assurance that any investors would receive a return of their capital. Investment in some of the
financial products may be suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack
of liquidity inherent in any such investment. Before deciding to invest, prospective investors should read the definitive offering and subscription
documents and pay particular attention to the risk factors contained therein.

Additional disclaimer for Singapore Persons

This document is intended to Singapore’s Accredited Investor and Institutional Investor. If the recipient of this document is not a Singapore’s
Accredited Investor and Institutional Investor, then such recipient should not act upon this document and should immediately return the same to
the sender. Further, this document may not be copied, duplicated and/or transmitted onward to any person, including any Singapore person.

Additional disclaimer for U. S. Persons

EAAA Pte Ltd is registered with the U.S. Securities and Exchange Commission (“SEC”) as a registered investment adviser under the U.S. Investment
Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder (the “Advisers Act”).In addition, none of the Funds advised
by EAAA Pte Ltd will be registered as an investment company under the U.S. Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (the “Investment Company Act”). Consequently, investors in a Fund will not be afforded the protections of the
Investment Company Act.
EAAA is not registered as a broker-dealer under the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the “Exchange Act”), and under applicable state laws in the United States. In reliance on the exemption from registration provided
by Rule 15a-6 of the Exchange Act and interpretations thereof by the U.S. Securities and Exchange Commission (the “SEC”), in order to conduct
certain business with “major U.S. institutional investors” (as defined in Rule 15a-6(b)(4) under the Exchange Act), EAAA Pte Ltd has entered into an
agreement with a U.S. registered broker-dealer, Edelweiss Financial Services Inc. (“EFSI”). Transactions in securities discussed herein will be effected
through EFSI.
This document is intended only to major U.S. institutional investors. If the recipient of this document is not a major U.S. institutional investor, then
such recipient should not act upon this document and should immediately return the same to the sender. Further, this document may not be
copied, duplicated and/or transmitted onward to any person, including any U.S. person.
Neither the SEC nor any state or non-U.S. securities commission has reviewed or passed upon the accuracy or adequacy of this document. Any
representation to the contrary is unlawful.

Additional disclaimer for U.K. Persons

The contents of this document have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000
(“FSMA”).
This document is for information purposes only and may be amended and/or supplemented without notice. Nothing in this presentation should be
construed as an offer, invitation or general solicitation to buy or sell any investments or securities, provide investment advisory services or to engage
in any other transaction, and this document may not be relied upon for the purposes of entering into any investment transaction. Any investment
should only be made by investors who understand and accept the risks involved. In the United Kingdom, this document is being distributed only
to and is directed only at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), (ii) high-net-worth entities falling within Article 49(2) of
the Order, and (iii) any other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant
persons”). Persons who are not relevant persons must not act on or rely on this document or any of its contents.

39