Definition
InvIT
An Infrastructure Investment Trust is a SEBI-regulated vehicle that owns operating infrastructure assets like roads or power lines and distributes their cash flows to unitholders.
An InvIT works like a REIT but for infrastructure — toll roads, transmission lines, gas pipelines and similar assets that generate steady cash flows. Investors buy units and receive periodic distributions from the underlying assets' income.
SEBI mandates that InvITs distribute most of their net distributable cash flows regularly. Distributions may include interest, dividend and return-of-capital portions, each with its own tax treatment. Some InvITs are listed and tradable; others are privately placed.
Returns hinge on the reliability of underlying asset cash flows, interest-rate movements and any change in unit price. They suit investors seeking infrastructure-linked income, with awareness of liquidity and concentration risks.
Related terms
- REITA Real Estate Investment Trust is a SEBI-regulated, listed vehicle that owns income-generating commercial property and passes most of its rental income to unitholders as distributions.
- Bond Investing PlatformsBond investing platforms are SEBI-regulated online avenues, including Online Bond Platform Providers, that let retail investors buy listed corporate and government bonds in small lots.
- Alternative Investment Fund (AIF)An Alternative Investment Fund is a SEBI-regulated privately pooled vehicle for sophisticated investors, classified into Category I, II and III with high minimum investment thresholds.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.