Infrastructure Investment Trust (InvIT)

2021 NOV 4

Preliminary   > Industry and Infrastructure   >   Infrastructure & Investment models   >   infrastructure

Why in news?

  • Canadian Pension Plan Investment Board and Ontario Teachers’ Pension Plan will be the anchor investors for the Infrastructure Investment Trust (InvIT) of the National Highways Authority of India (NHAI) with each picking up 25% stake.

About InvIT:

  • An Infrastructure Investment Trust (InvIT) is a collective investment scheme, similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.
  • The InvIT is designed as a tiered structure with Sponsor setting up the InvIT which in turn invests into the eligible infrastructure projects either directly or via special purpose vehicles (SPVs).
  • In case of Public Private Partnership (PPP) projects, such investments can only be through SPV.
  • The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014.
  • InvITs are very much similar to the Real Estate investment Trusts (REITs) in structure and operations.
  • InvITs are modified REITs designed to suit the specific circumstances in India.

PRACTICE QUESTION:

Which of the following statements is/are correct regarding ‘Infrastructure Investment Trust (InvIT)’?

1. InvITs are regulated by RBI

2. Only public enterprises can invest in InvITs

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer