An InvIT consists of four parties

the trustee, the sponsor, the investment manager, and the project manager. They each have a prominent role to play in infrastructure investment trusts which are as follows -

Trustee

A trustee's primary responsibilities include holding an InvIT's assets and protecting the unitholders' interests. Other duties of an InvIT trustee include ensuring that dividends are distributed to unitholders on time and monitoring the activity of the InvIT manager (s). The trustee must invest at least 80% in infrastructure assets.

Sponsor

An InvIT may have no more than three sponsors. A sponsor is a company in charge of infrastructure development, as well as the company that built, owned, or operated the assets that comprise the InvIT. Classifying as a sponsor requires the company to have a minimum net worth of Rs. 100 crore. The trustees are selected by the sponsor, who is also responsible for establishing the InvIT. According to regulations, the sponsor must hold a 15% stake in the InvIT for three years after its formation.

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Investment Manager

The responsibility of the investment manager is to make sure that the unitholders are receiving the expected returns. The growth of an InvIT also depends on the investment manager, who is the key decision-maker in new investments. The investment manager also decides how much information to disclose in compliance with regulations to stakeholders.

Project Manager

The project manager is the primary authority in charge of an InvIT's development, operation, and maintenance. The project manager also ensures that under-construction projects get completed on time and that completed projects run smoothly.

At present, the future of InvITs in India looks promising. According to ET, over the next 4-6 years, both REITs and InvITs have a Rs. 8 lakh crore potential. ON HOLD