Introduction to Infrastructure Investment Trust
Infrastructure Invest Trusts or InVITs are a type of investment which are similar to mutual funds’ investments. These work similar to mutual funds’ investments which mean they enable direct investment from individuals or organisations to earn profits in the form of returns.
The Infrastructure Investment Trust or InVITs is regulated by the SEBI or the Securities and Exchange Board of India and it works as a modification of the real estate investment trusts or REITs, which is designed to focus on the specific circumstances related to the infrastructure sector.
The Infrastructure Investment Trust or InVITs works with an objective of promoting the infrastructure sector of the country and encouraging the Indian citizens to invest their money in this sector which can be then modified according to certain circumstances.
The Securities and Exchange Board of India or SEBI regulated the Infrastructure Investment Trusts or InVITs in the year 2014 with an objective to promote the infrastructure sector of the country. This investment instrument has a specific structure which is formed by four important components— trustee, sponsor, investment manager and project manager.
All these four components perform individual functions which are important for the functioning of InVITs. The trustee inspects the performance of the Insurance Investment Trusts or InVITs and is certified by the SEBI. The sponsor or sponsors promote any organisation or individual established with the InVITs. Investment manager is the one who supervises investments made through the Infrastructure Investment Trusts and the project manager is the one who focuses on execution of the projects planned by the Infrastructure Investment Trusts or InVITs.
Types of Infrastructure Investment Trusts or InVITs
Infrastructure Investment Trusts are classified into two types which are as follows:
Investment in Revenue generating finished project
This focuses on investments made through revenue generating finished projects and invites investors through public offering.
Investments in projects under construction
The investors can also invest in projects that are still under construction, such investments are done more privately.
