Let’s talk about InvIT. An acronym for infrastructure investment trust, it is an investment method that is tax-efficient and gathers funds from long-term investors. As a result, infrastructure assets that generate an income are acquired from the owners.

InvIT investments can be made either through the Holding Company or Special Purpose Vehicles the own the operating infrastructure assets. The income from these assets is regular and stable. The long term investors are paid the Net Distributable Cash-Flows (NDCF).

Monetizing assets

Developers can monetize their assets through InvIT by gathering multiple projects under one InvIT structure. This makes direct investment possible in revenue generation or finished infrastructure projects. Investors get access to the benefits of investing in infrastructure. Because it provides liquidity, transparency and dividends among other things. InvITs are recognized and accepted by global organizations and individuals alike.

6 Key Features of InvIT

Let’s take a look at all that InvIT offers. There are at least 6 key features. First, InvITs pool together money from investors, which goes into real estate or infrastructure assets. Second, these units can be listed and traded on stock exchanges. Third, at least 90% of the NDFC has been distributed to long-term investors. Fourth, the trading lot has been reduced to ONE and fifth, InvITs are not taxed and have pass-through structures instead. Finally, for InvITs to come into play, at least 80% of the assets should be operational and generating income.