InvITs – Infrastructure Investment Trusts
Introduction
Similar to REITs, InvITs allow investment in infrastructure projects like Highways, Power Transmission lines, and Gas Pipelines.
1. What is an InvIT?
- It pools money to invest in infrastructure assets.
- These assets generate steady cash flow (Toll collection, Power transmission fees).
- Income is distributed to investors.
2. Types of InvITs
- Public Listed InvITs: Traded on exchange. (e.g., PowerGrid InvIT, IRB InvIT).
- Private Listed InvITs: Only for large institutional investors.
3. Difference: REIT vs InvIT
| Feature | REIT | InvIT |
|---|---|---|
| Asset Class | Real Estate (Offices, Malls) | Infrastructure (Roads, Power) |
| Income Source | Rent | Toll, Tariff, Annuity |
| Risk | Moderate (Tenants may leave) | Low/Moderate (Long term concessions) |
4. Examples in India
- PowerGrid InvIT: Owns transmission lines.
- IRB InvIT: Owns toll roads.
- Indigrid InvIT: Power transmission.
- NHAI InvIT: National Highways.
Summary
- Focus: Infrastructure.
- Structure: Trust.
- Yield: Generally higher than Fixed Deposits.
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