Investing in Infrastructure: Unlock The SEBI Registered InvITs in India

SEBI registered InvITs in India

SEBI registered InvITs in India

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The government of India has been focusing on infrastructure to make India a developed country by 2047. In any country’s development infrastructure plays a crucial role that propels economic growth. Infrastructure investment funds or InvITs are like a bridge between investors and the infrastructure companies.

To bridge the funding gap in this sector, the Securities and Exchange Board of India (SEBI) introduced Infrastructure Investment Trusts (InvITs) in 2014. The SEBI regulation of 2014 was again amended in 2023. SEBI has approved 24 infrastructure investment funds. It is advisable to keep an eye on them and only invest in SEBI registered InvITs. Let us explore SEBI-registered InvITs, their structure, benefits, and how they can be a potential investment avenue for you.

What are InvITs Registered with SEBI?

SEBI-registered InvITs are just like Real Estate Investment Trusts (REITs). However, these InvITs focus only on the infrastructure sectors such as roads, highways, airports, power, etc. This is a collective investment schemes that pool funds from investors and invest them in income-generating infrastructure assets.

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Entities of Infrastructure Investment Trust in India

In the structure of an InvIT, three players are important:

  • Sponsor: A company that owns the infrastructure assets on which the InvIT was created. Typically, the company operates or manages these assets and contributes to the InvIT.
  • Trustee: The trustee here is an independent body that acts as a custodian of the investors’ money. The trustee ensures that the InvIT acts as per the SEBI regulations.
  • Unitholders: The investors are the unit holders of the InvITs. Those who purchase the units of the InvIT. Investors get tax benefits while investing in InvITs. Again, unit holders will also get regular income in the form of Dividends which are generally exempt from income tax in the hands of the investors.
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Types of SEBI registered InvITs in India

There are mainly two types of SEBI-registered InvITs – Listed InvITs and Non-listed InvITs

  • Listed InvITs are those InvITs that can raise funds through an initial public offering (IPO). These InvITs are listed on stock exchanges and can easily be traded on the exchanges. This helps investors particularly retail investors to participate in the sector easily.
  • Non-listed or Private InvITs raise funds through private placement. They are non-listed entities and only subscribed to by institutional investors.

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Infrastructure Investment trust stocks

Infrastructure investment trust regulated by SEBI

Infrastructure investment trust regulated by SEBIRegistration No.Market Cap (Cr)PEDividends
IRB InvIT FundIN/InvIT/15-16/0001
India Grid TrustIN/InvIT/16-17/000510,348.4128.42.1
India Infrastructure TrustIN/InvIT/18-19/00086,108.8011.690
Data Infrastructure TrustIN/InvIT/18-19/000939,956.0533.30
Digital Fibre Infrastructure TrustIN/InvIT/18-19/0010
Oriental InfraTrustIN/InvIT/18-19/0011
IndInfravit TrustIN/InvIT/17-18/000714,082.9800
Indian Highway Concessions TrustIN/InvIT/19-20/0013
National Highways Infra TrustIN/InvIT/20-21/00148,971.8330.950
Roadstar Infra Investment TrustIN/InvIT/20-21/0015
POWERGRID Infrastructure Investment TrustIN/InvIT/20-21/00168,801.5111.7115.51
Shrem InvitIN/InvIT/20-21/00176,667.287.740
Anzen India Energy Yield Plus TrustIN/InvIT/21-22/0020
SchoolHouse InvITIN/InvIT/21-22/0021
Cube Highways TrustIN/InvIT/22-23/002212,903.4600
Bharat Highways InvITIN/InvIT/22-23/00234,564.488.660
Intelligent Supply Chain Infrastructure TrustIN/InvIT/22-23/0024
NDR InvIT TrustIN/InvIT/23-24/00253,946.251.030
Sustainable Energy Infra TrustIN/InvIT/23-24/0027
Nxt-Infra TrustIN/InvIT/23-24/0028

Latest in SEBI registered InvITs in India

The SEBI introduced some changes to regulate the InvIT market effectively:

  • Introduction of Unlisted InvITs: In 2021, SEBI amended its regulations to allow for unlisted InvITs. This has broadened the investor base and provided more flexibility for infrastructure companies.
  • Focus on Green Infrastructure: Governments worldwide are focusing on green infrastructure projects within InvITs. India is no exception. With the introduction of green infrastructure InvITs, we can commit to sustainable development.
  • Increased Investor Participation: Recently, we have witnessed a growing awareness of the potential benefits of InvITs among investors, particularly retail investors. Hence, retail investor participation in InvITs has increased in InvITs in India.

To do for Retail investors Before Investing in InvITs Registered with SEBI

While SEBI registered InvITs offer attractive features, it is important to understand the asset before investing. Certain factors are most important to consider before investing in InvITs in India.

  • Underlying Assets: It is important to study the particular InvIT before putting your money. Understanding the performance of the InvIT is highly crucial for a successful investment. Find out the quality and stability of the underlying infrastructure assets of the InvITs. Analyze the project details and cash flow generation potential of the projects under the InvIT.
  • Sponsor Track Record: The sponsor’s experience and track record in managing infrastructure projects are very crucial for your investment decision. Evaluate their financial strength over the last 5 years and look for the promoter’s commitment to the InvIT.
  • Distribution History: As per the mandate of SEBI, every InvIT has to invest 90% of their investment in income-generating projects so that they can distribute profits among the unit holders or investors. Evaluate the InvIT’s historical distribution record to understand its ability to generate consistent income.
  • Investment Horizon: Investing in InvITs is mainly for the long-term where these InvITs can provide a sustainable income to the investors seeking regular income. Hence, if an InvIT is doing well, hold your investment for a minimum of 3-5 years to gain a good return.
  • Market Risks: These InvITs are also subject to market risks such as economic downturns, policy changes, etc. Fluctuations in interest rates and economic conditions can impact their performance. Keeping an eye on these factors will also benefit you in getting returns.

You may interested to read How to Invest in Infrastructure Investment Trusts invITs in India

Final words

While InvITs Registered with SEBI in India provide a unique opportunity to participate in India’s infrastructure growth story and generate regular income, it is also important to consider the above risk factors before investing. If you evaluate all the above factors, you can make good investment decisions and potentially benefit from this growing asset class. Happy investing!!!

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Frequently Asked Questions (FAQs)

Who regulates InvITs in India

Market regulator SEBI is the regulatory authority to regulate InvITs in India. The SEBI approves and provides a list of InvITs to be listed on exchanges.

Is there tax benefits for InviTs?

Yes, InvITs are tax free. You can enjoy tax free passive income while investing in InvITs.

What is InvITs?

InvITs are like mutual funds where investors can directly invest to get the benefit of infrastructure growth. InvITs (Infrastructure Investment Trusts) are formed and regulated by the SEBI Regulations, 2014. For
more information, please refer the article.

What are the InvITs Registered with SEBI?

Yea, you can find the complete list of InvITs Registered with SEBI in the article.

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