Infrastructure Boom Drives Nifty Infra Index to Nearly 2x the Gains of the Nifty50, Shows PL Capital Analysis

Mumbai | November 25

India’s infrastructure sector continues to deliver one of the strongest multi-year market performances, with the Nifty Infrastructure Index outpacing the Nifty50 by a wide margin as the country enters a deeper, more broad-based capital expenditure cycle. A new PL Capital report shows that infrastructure historically a slower-moving, policy-sensitive segment has transformed into a high-conviction, high-alpha theme between 2023 and 2025.

Over the past three years, the Nifty Infra Index has delivered 82.8%, almost double the 41.5% return posted by the Nifty50. The outperformance is consistent across timeframes:

• 1-year: 14.5% (Infra) vs 10.5% (Nifty50)
• 3-year: 82.8% vs 41.5%
• 5-year: 181.2% vs 100.3%

PL Capital attributes this divergence to India’s new capex architecture and the increasing multiplier effect of infrastructure spending. “Each ₹1 of capex deployed in infra is estimated to have a ₹2.5–₹3.0 impact on GDP,” the report notes, underscoring why infrastructure stocks have seen a sustained re-rating over multiple years.

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A deeper and more predictable capex cycle

According to the report, India’s infrastructure ecosystem in 2025 stands at its most pivotal point in a decade.
Central government capital expenditure has reached ₹11.21 lakh crore, equivalent to 3.1% of GDP, driven by ongoing highway expansion, urban transport upgrades, defence manufacturing, logistics modernisation and the push for domestic energy transition.

The National Infrastructure Pipeline, expanded Infrastructure Investment Trusts (InvITs) and improved project execution have also created a more reliable capex environment — reducing delays, improving order-book visibility and boosting balance-sheet quality across listed infrastructure companies.

PL Capital estimates the infrastructure market size at ₹16.87 lakh crore in 2025, projected to expand to ₹24.82 lakh crore by 2030 at an 8% CAGR. This reflects not only traditional sectors but also new-age infrastructure plays, including digital capacity, renewables and green hydrogen.

Strong momentum across India’s core infrastructure systems

The report highlights how the breadth of India’s infrastructure expansion from highways and ports to renewables and data centres has contributed to the index’s strong performance.

• Highways – The national highway network has expanded to 146,342 km, with annual construction consistently holding above 10,000–11,000 km. What was once considered peak execution has now become the baseline.
• Aviation- India has risen to one of the fastest-growing aviation markets globally. Operational airports have increased from 74 in 2014 to more than 163 in 2025, supported by UDAN, new greenfield airports and the monetisation of state-owned assets.
• Ports & Logistics- Major ports handled 795 million tonnes of cargo in FY24, while India’s logistics sector valued at $317 billion in 2024 is projected to grow to $484 billion by 2029, aided by digital freight platforms, multimodal corridors and GST-led consolidation.
• Energy & Renewables- India’s installed capacity stands at 476 GW, with more than 180 GW sourced from renewables. The target of 500 GW non-fossil capacity by 2030 is accelerating investment in transmission networks, storage solutions and domestic manufacturing.
• Digital Infrastructure- Data-centre capacity is projected to grow from 350 MW in 2019 to 1,700 MW in 2025, driven by hyperscaler demand, AI workloads, cloud adoption and 5G-led enterprise digitalisation.
• Green Hydrogen- With 158 projects in the pipeline under the National Green Hydrogen Mission, India is positioning itself as a future hub for clean-energy manufacturing and exports.

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A structurally stronger infrastructure cycle

PL Capital emphasises that this infrastructure cycle differs sharply from previous ones.
Project execution has improved, financing sources have widened and policy continuity has strengthened creating a more stable operating environment for infrastructure firms. As a result, companies across engineering, construction, utilities, renewables and logistics are delivering stronger order books and healthier cash flows.

For investors, the multi-year outperformance of the Nifty Infrastructure Index reflects this structural shift. With capex visibility improving, economic multipliers rising and private-sector participation deepening, India’s infrastructure sector is now positioned as one of the country’s most reliable long-term growth engines.