Economy GS 3 In the news 7 times

Infrastructure Investment Trusts (InvITs)

A Key Monetisation Instrument

InvITs are a critical vehicle for channeling private capital into infrastructure assets. Their growth is directly linked to the success of both NMP 1.0 and NMP 2.0.

Key details

Structure: InvITs are SEBI-regulated trusts that pool investor money to acquire revenue-generating infrastructure assets (toll roads, power transmission lines, pipelines) and distribute the income to unit holders.
Regulatory framework: SEBI (Infrastructure Investment Trusts) Regulations, 2014; InvITs can be publicly listed or privately placed.
Government InvITs: NHAI InvIT (National Highways Authority of India), PGCIL InvIT (Power Grid Corporation) — both listed on exchanges; raised thousands of crores from domestic and foreign institutional investors.
Advantages for government: Converts future cash flows from operational assets into immediate upfront capital — which is then deployed for new greenfield infrastructure creation.
Investor profile: Primarily institutional investors (pension funds, insurance companies, sovereign wealth funds, FPIs) — attracted by stable, regulated long-term cash flows.
InvIT vs. REIT: InvITs invest in infrastructure assets (roads, pipelines, power transmission); REITs invest in real estate (commercial office buildings, retail malls). Both are SEBI-regulated pass-through structures.