How InvITs can add yield to your investment portfolio

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₹8,416 crore to these instruments as of 30 September. InvITs were launched in 2017 but remain somewhat unfamiliar to many investors. These innovative financial instruments are designed to raise capital by issuing units to investors, which are then channelled into infrastructure assets.

InvITs are a crucial means of funding, enabling individuals to collectively invest in and benefit from various infrastructure projects. InvITs are diverse in their asset portfolios, owning and managing completed or under-construction projects that encompass an array of critical infrastructure sectors. These assets may include highways, power transmission networks, telecom towers, fibre optic networks, and more.

Notably, there are 22 Sebi-registered InvITs in India, but only three are publicly listed and liquid: IndiGrid InvIT, PowerGrid InvIT, and IRB InvIT. The former two focus on power transmission assets, while the latter invests in a portfolio of road assets, collecting tolls over the residual life of the asset. InvITs are akin to mutual funds in their structure and function.

They aggregate investments from numerous individual and institutional investors, which are then strategically deployed into infrastructure projects. Expert fund managers oversee InvITs, just as they do for mutual funds, ensuring efficient management and a potentially steady income stream for unit holders. These trusts serve as a gateway for investors to participate in India’s infrastructure growth story while allowing them to enjoy the benefits of regular income and portfolio diversification.