Page 37 - Banking Finance February 2021

ARTICLE

INFRASTRUCTURE

INVESTMENT

TRUST IN INDIA

What is Infrastructure Investment Trust? fund in which individuals, institutions or the companies
can invest.
Y Infrastructure investment trusts, or InvITs, are
instruments that work like mutual funds. Y The trust fund is traded on stock exchange hence
available for subscription.
Y InvITs are designed to pool small sums of money from a
number of investors to invest in assets that give cash Y The trust fund further invests the amount in the
flow over a period of time. infrastructure projects.

Y Part of this cash flow would be distributed as dividend Y On completion of the infrastructure projects, the
back to investors. revenue or the sales proceeds are distributed back to
the investors in the form of dividends.
In the layman's term, they are the mutual funds for
infrastructure projects.
Why choose INVITs?
How are they established? Y The primary objective of InvITs is to promote the
infrastructure sector of India by encouraging more
Y To understand better, InvIts are established as a trust
individuals to invest in it and can be modified according
About the author to a given situation.
Y Typically, such a tool is designed to pool money from
Navnit Kumar several investors to be invested in income-generating
Senior Manager (Faculty) assets. The cash flow thus generated is distributed
Union Bank of India Staff among investors as dividend income.
Training Centre, Gurugram Y When compared to Real Estate Investment Trust or

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