Infrastructure investment trusts
InvIT
What are Infrastructure Investment Funds?
Infrastructure Investment Funds provide investors access to operational infrastructure assets that generate steady revenue over time. These investments are structured under regulated frameworks and are designed for investors seeking income visibility and long-term capital stability.
Key benefits of Investing In Infrastructure Funds
Predictable and Stable Cash Flows
Revenue generated from long-term infrastructure usage contracts.
Regular Income Distribution
Periodic payouts from operational cash flows.
Inflation-Linked Returns
Returns structured to adjust with inflation-linked pricing models.
Portfolio Diversification
Low correlation with traditional equity markets.
SEBI-Regulated Investment Structure
Governed by defined regulatory and disclosure norms.
Liquidity Through Listed Structures
Exchange-listed units offering market-based liquidity.
Who Should Invest in Infrastructure investement funds ?
Infrastructure Investment Funds are suitable for investors seeking predictable income, long-term capital stability, and exposure to essential infrastructure assets. These investments are typically aligned with medium to long-term horizons and are designed for investors comfortable with regulated alternative investment structures.
Income-Oriented Investors
Investors seeking stable and predictable income through periodic distributions from operating infrastructure assets.Long-Term Investors
Individuals with a medium to long-term investment horizon who prioritize steady cash flows over short-term market volatility.Investors Seeking Portfolio Diversification
Investors aiming to reduce reliance on traditional equity and mutual fund investments by adding low-correlation asset classes.HNI & Institutional Investors
High net-worth individuals and institutions comfortable with regulated alternative investment structures and defined lock-in periods.
invit
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Why Consider Polemarch For Infrastructure funds?
Curated Infrastructure Opportunities
Access selectively evaluated infrastructure investment funds focused on income-generating and operational assets.Transparent & Clear Disclosures
Receive complete visibility on fund structure, risk factors, cash flow mechanisms, and regulatory disclosures before investing.Compliance-Aligned Process
All offerings follow SEBI regulations and established compliance standards for alternative investment products.Guided Investment Support
End-to-end assistance across onboarding, documentation, and transaction execution for a smooth investment experience.
Infrastructure Investment Trusts (InvITs): A Guide to Investing in India’s Growth
Investing in infrastructure is a key driver of India’s economic growth. Infrastructure Investment Trusts (InvITs) offer a unique way for investors to participate, providing stable income streams and diversification opportunities. Let’s break down what InvITs are, how they work, and why they might be right for your portfolio.
What Are InvITs?
An Infrastructure Investment Trust (InvIT) is an investment vehicle that pools money from multiple investors to invest in income-generating infrastructure assets. Think of it like a mutual fund, but specifically focused on infrastructure projects – roads, highways, power plants, and more – regulated by the Securities and Exchange Board of India (SEBI). InvITs are listed on stock exchanges, allowing for easy buying and selling of units.
How Do InvITs Work?
InvITs operate with a clear objective: to generate income for investors through investments in revenue-producing assets. They come in two primary forms:
- Revenue-Generating Finished Projects: These InvITs invest in infrastructure projects that are already operational and generating cash flow, typically through public offerings of units.
- Projects Under Construction: These InvITs invest in projects still being built or recently completed, utilizing private placements of units.
The Structure Behind an InvIT
An InvIT is governed by a robust structure to ensure investor protection and efficient management:
- Trustee: Registered with SEBI, the Trustee oversees the InvIT’s operations and ensures adherence to regulations.
- Sponsor: A company or entity (with a minimum net worth of Rs. 100 crore) that provides initial capital and expertise. Sponsors typically hold at least 15% of the InvIT units.
- Investment Manager: Responsible for day-to-day investment decisions and operational oversight.
- Project Manager: Oversees the execution of projects, particularly PPP (Public-Private Partnership) projects.
Key Benefits of Investing in InvITs
- Diversification: InvITs offer a way to diversify your portfolio across multiple infrastructure assets.
- Fixed Income Potential: They provide a steady stream of income through distributions and potential dividend payments.
- Liquidity: Units are traded on stock exchanges, offering relative liquidity (though large investments can be challenging for smaller investors).
- Professional Management: Experienced investment managers handle the complexities of infrastructure investing.
Advantages for Investors & Promoters
- Investors: Receive steady returns through income distribution and dividend payments.
- Promoters: Can reduce debt burdens by selling assets into an InvIT.
Disadvantages to Consider
- Regulatory Risk: Changes in SEBI regulations can impact InvIT performance.
- Inflation Risk: Rising inflation can erode investment returns.
- Asset Risk: Infrastructure projects are long-term investments with inherent delays and uncertainties.
InvITs vs. REITs: What’s the Difference?
While both InvITs and REITs pool investor money to invest in income-generating assets, they focus on different sectors:
| Feature | InvITs | REITs |
|---|---|---|
| Asset Focus | Infrastructure (roads, power, etc.) | Real Estate (warehouses, malls) |
| Liquidity | Generally More Liquid | Often Less Liquid |
| Income Stability | Can be less stable due to project risks | Typically more stable with rental contracts |
Prospects for InvITs in India
The future of InvITs in India looks promising, driven by:
- Refinancing Opportunities: Significant refinancing options for existing infrastructure projects.
- Developer Capital Release: Allows developers to free up capital for new investments.
- Cost-Effective Capital: Provides access to long-term financing at competitive rates.
- Increased Foreign Investment: Attracts international investors to the Indian infrastructure sector.
Investment Minimum: To invest in an InvIT IPO, a minimum investment of Rs. 10 lakh is required.
