India looks to tap private equity behemoths for Reits with PSUs

The plan, still at an early stage, is part of a broader push to accelerate government asset monetization following the Union budget for 2026-27, which proposed using Reit structures to recycle state-owned assets and attract institutional capital. Reits allow asset owners, in this case the government, to convert infrastructure into tradable securities, unlocking capital while retaining ownership of the underlying assets as a sponsor, generating income through long-term leases.

“The discussions are still early, and there's no official mandate yet. But monetizing optic fiber networks of these companies and their surrounding infrastructure remains the lowest hanging fruit for a divestment strategy,” one of the people cited above said, requesting anonymity.

The trusts are expected to hold assets from companies like Bharat Sanchar Nigam Ltd, RailTel Corp. of India Ltd, and Power Grid Corp. of India Ltd, the person said. These entities operate extensive fibre networks and, in some cases, control land parcels that could be monetized under existing guidelines.

Blackstone, Brookfield

Some of global investors with real estate muscle include Blackstone Inc. and Brookfield Corp., both of which operate large-scale data centre platforms in India and are among the most active investors in the country’s Reit ecosystem.

Emailed queries sent to the finance ministry, Blackstone, Brookfield, BSNL and PowerGrid remained unanswered until press time. A RailTel spokesperson said the company does not have any existing land bank that can be earmarked for monetization under the Reit framework proposed by the ministry of finance.

“Officials are identifying assets, and companies can be added or dropped from the plan based on a feasibility test at a later stage,” a second person said. “The scope of the plan can even expand to utilize the assets for establishing specialized data centre trusts, which will sweeten the deal for any incoming private equity investor.”

Such public-private partnership structures are not new in India, where infrastructure assets have previously been monetized through Reit and Infrastructure investment trust (InvIT) frameworks to attract institutional capital.

PowerGrid and RailTel operate optic fiber infrastructure across the country and lease bandwidth to telecom operators. PowerGrid also has regulatory approval from the Central Electricity Regulatory Commission to establish data centres on surplus substation land. BSNL, meanwhile, controls land parcels across tier-one and tier-two cities, monetization of which is already underway under guidelines set by the Department of Investment and Public Asset Management, under the finance ministry.

Execution hurdles

An asset manager at a domestic real estate investment firm said the proposed data centre trusts involving the government and private equity players could face distinct structural complexities.

“Executing transactions for dropping data centre assets into Reits will require unbundling optical fiber networks from core telecom and transmission operations, executing land title transfers across varied municipal jurisdictions, and structuring lease agreements that satisfy national data security and localization regulations,” the asset manager said. “Institutional investors willing to get involved will look to standardize these models before supplying any upfront capital expenditure required to scale server capacity."

In April, Blackstone-owned data centre firm AirTrunk acquired Blackstone-backed Lumina CloudInfra in India, which develops large-scale data centres. Late last year, Brookfield, in partnership with Reliance Industries Ltd and Digital Realty, announced an $11-billion investment over five years to build a 1 GW data centre in Visakhapatnam, Andhra Pradesh.

“Other than being major data centre names, Blackstone and Brookfield have sufficient prior experience handling REIT structures in the country. It will be a natural progression for the government to partner with them at some stage for data centre Reits,” a fourth person said.

Blackstone is the most influential investor in India’s Reit market, having backed four of the five listed mainboard Reits—Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and Knowledge Realty Trust—and is preparing to launch a fifth, Bagmane Prime Office REIT, with a ₹3,405 crore initial public offering (IPO) opening in this month. Brookfield Asset Management sponsors Brookfield India REIT, the other mainboard Reit.

According to CBRE’s 2026 Asia Pacific Investor Intentions Survey, data centres are expected to be among the top three preferred sectors for Reit capital allocation in 2026. “Looking ahead, data centres are expected to attract sustained capital, bolstered by long-term tax incentives for domestic cloud services extending until 2047,” the report said.

Agnidev Bhattacharya

Agnidev is a business journalist with over two years of reporting experience tracking the intersection of capital, policy, and corporate strategy in India.He joined Mint in December 2025, after a stint at NDTV Profit (erstwhile BQ Prime). At Mint, Agnidev focuses on the high-stakes world of the Indian capital market, specialising in mergers and acquisitions, burgeoning IPOs, and the investment banking industry.Backed by a rigorous, data-driven approach, Agnidev frequently breaks news on the valuation cycles, deal pipelines and listing strategies of India’s most prominent companies. His reportage offers deep dives into the operational health of market leaders across the corporate landscape, providing readers with a clear-eyed view of institutional growth.He has reported on major issues like India's derivatives frenzy, IPO froth, the competitive quick commerce industry, the real-money gaming ban, and has broken investigative stories related to scandals such as IndusInd Bank's accounting manipulation and the Gensol-BluSmart fiasco.As a reporter, he brings stories that ultimately affect your stock market investments, and tries to bring clarity and brevity in a field that is often filled with jargon and noise.