In our previous articles, we have discussed many investment avenues. Today,  we’ll be focusing on InvITs (Infrastructure Investment Trusts).

Infrastructure Investment Trusts (InvITs) have gained prominence in the Indian financial landscape, presenting investors with an alternative avenue for capital deployment. As with any investment, investing in InvITs warrants a thorough analysis of the current market conditions, regulatory environment, and the inherent risks and rewards associated with these instruments.

InvITs are investment vehicles that pool funds from various investors to invest in infrastructure projects. These projects, which may include roads, power transmission, and renewable energy assets, generate steady cash flows, making them an attractive investment option for income-seeking investors.

What types of infrastructure projects do InvITs invest in?

Besides road construction and operating highways, InvITs usually invest in power generation, distribution, and transmission. Some of these assets may be owned and managed by InvITs. An InvIT can invest in any infrastructure project, as the name suggests.

Sponsor: Only one sponsor can create an InvIT, and no more than three sponsors can be involved.

• A 100cr should be the sponsor's net worth.
• Five years of experience in fund management or infrastructure development is required.
• 15% required stake in the InvIT

Investment Manager: In charge of managing assets through investments and divestitures.

• A minimum net worth of 10 Cr
• 5 years of fund advisory or infrastructure development expertise is required.
• The sponsor or the investment manager should be Indian, otherwise, any investment by InvIT will be considered as a foreign investment.

The Trustee bears the responsibility of safeguarding the InvIT's assets for the benefit of its unit holders.

• The project manager and investment manager are under the trustee's supervision.

Project Manager:

• The Investment Manager appoints this person.
• They oversee InvIT's assets and make sure that projects are finished on schedule.

How to invest in InvITs?

As with shares, InvITs can be purchased through regular trading accounts on the major exchanges, the BSE and NSE. Mentioned below is the key metrics of the evolution of these 3 InvITs in the last year!

Why should you consider investing in InvITs?

Investors with a long-term horizon, a tolerance for moderate risk, and an appetite for regular income may find InvITs to be a valuable addition to their portfolios. However, it is advisable to consult with financial experts, assess individual risk profiles, and stay informed about market trends before making an investment

decisions.

Stable Income Streams:

InvITs primarily invest in revenue-generating infrastructure assets, providing a relatively stable income stream. This stability is attractive to conservative investors seeking regular dividends.

Diversification:

Investing in InvITs allows for diversification across various infrastructure sectors. This diversification can mitigate risks associated with the performance of a single asset or sector, providing a more balanced portfolio.

Professional Management:

InvITs are managed by professional teams with expertise in infrastructure project management. This can translate into efficient operations and better risk management, potentially enhancing the overall performance of the investment.

Tax Efficiency: \InvITs enjoy certain tax benefits, such as exemption from dividend distribution tax. This can result in higher net returns for investors compared to direct investments in infrastructure projects.

iquidity:

InvITs are listed on stock exchanges, providing investors with a degree of liquidity. This feature distinguishes them from direct investments in infrastructure projects, which may lack a readily available market.

Disclaimer: The above information should not be relied upon for personal or financial decisions, and you should consult an appropriate financial professional for specific advice. The information presented under our newsletter and blogs is solely for informational purpose