In the news
Jul 17, 2023
Infrastructure Investment Trusts (InvITs) have gained popularity as investment vehicles, offering individuals and institutions an opportunity to participate in India's infrastructure growth story. If you are interested in investing in InvITs and capitalizing on the potential benefits they offer, this step-by-step guide will provide you with a clear understanding of the process and help you navigate your way to successful InvIT investments.
Begin by researching and gaining a thorough understanding of InvITs. Learn about their structure, investment objectives, asset portfolio, historical performance, and associated risks. Conduct due diligence on the specific InvIT you are interested in, reviewing the offering document, prospectus, and financial reports to evaluate its potential.
To invest in InvITs, you will need to open a demat account and identify a reputable broker or financial institution that offers InvIT investment options. Ensure that your chosen broker or institution has the necessary regulatory approvals and provides access to a wide range of InvIT offerings.
Contact your chosen broker or financial institution to initiate the account opening process. Provide the required documents and information, such as identity proof, address proof, and bank account details, to complete the account opening formalities. Your broker will guide you through the process and assist with any queries.
Decide on the amount you are comfortable investing in InvITs based on your financial goals, risk tolerance, and investment horizon. Consider diversifying your investments across different InvITs to spread risk. Assess your risk profile and align it with the InvITs that match your investment objectives.
Once your demat account is opened and funded, you can place investment orders for the desired InvITs through your broker's trading platform. Specify the quantity or value of units you wish to purchase and review the prevailing market price before placing your order. Ensure you have sufficient funds available in your trading account to cover the investment amount.
After investing in InvITs, regularly monitor the performance of your investments. Keep track of news, updates, and financial reports related to the InvITs in your portfolio. Stay informed about any changes in the infrastructure projects, regulatory developments, or market conditions that may impact your investment.
Understand the tax implications associated with investing in InvITs. InvITs enjoy certain tax benefits, such as tax-exempt income and preferential tax treatment for unit holders. However, consult with a tax professional to understand the specific tax rules and implications based on your investment circumstances and jurisdiction.
Periodically review your InvIT investments and assess their performance relative to your investment goals. Consider rebalancing your portfolio if necessary, based on changes in your risk profile, financial objectives, or market conditions. Regularly evaluate the need to reallocate funds or make adjustments to your investment strategy.
Investing in InvITs can be a rewarding avenue, offering the potential for stable income, diversification, and participation in the growth of India's infrastructure sector. By following this step-by-step guide, conducting thorough research, selecting a reputable broker, and monitoring your investments, you can navigate the process of investing in InvITs with confidence. Remember to assess your risk profile, align investments with your financial goals, and consult with professionals when needed. With proper diligence and a well-informed approach, you can unlock the investment potential of InvITs and contribute to the growth of India's critical infrastructure while potentially earning attractive returns on your investments.