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Infrastructure Investment Trusts
A way to own a share of income-generating infrastructure, such as roads, power lines and solar parks, with the potential for regular distributions.
What an InvIT is
An Infrastructure Investment Trust (InvIT) is a trust, regulated by the Securities and Exchange Board of India (SEBI), that owns infrastructure assets, mostly completed and already earning, and passes most of the cash they earn on to its unitholders.
Think of it like a mutual fund that owns toll roads or power transmission lines instead of shares. You buy units of the trust. The trust collects tolls, tariffs or fees from its assets, pays its costs and interest, and distributes the rest to you.
InvITs may own assets such as:
How distributions work
SEBI rules require an InvIT to pass on at least 90% of its net distributable cash flows to unitholders. A publicly offered InvIT must declare a distribution at least once every six months.
A distribution is usually made up of different parts, and each part can be treated differently for tax:
The InvIT states the split with every distribution. Because tax depends on this mix and on whether you are resident or non-resident, please check with a tax professional. Distributions can go up or down, and can stop. They are never guaranteed.
The risks to understand
InvITs are sometimes described as "bond-like". They are not bonds. Your capital is not protected, and the unit price moves with the market.
Who it may suit, and how Finpotters helps
InvITs may suit investors who want some regular income alongside growth, who can hold for several years, and who understand that both the price and the payouts can change. They are usually one part of a diversified portfolio, not the whole of it.
- Check the fitWe look at your goals, income needs, time horizon and existing investments before talking about any InvIT.
- Explain the trust in plain wordsWhich assets it owns, how long their contracts run, how much it borrows, and what the recent distributions were made of.
- Access and paperworkWe help you access publicly offered InvITs through regulated channels, using your own demat account.
- Periodic reviewsWe review how the InvIT fits your portfolio as your needs change.
Common questions
How do I buy InvIT units?
How often are distributions paid?
Is an InvIT the same as a REIT?
Are InvIT payouts guaranteed?
How are InvIT distributions taxed?
Can NRIs invest in InvITs?
Interested in infrastructure income?
Let's look at whether InvITs fit your goals, and what to check before you invest.