InvITs in India – A Complete Beginner-to-Advanced Guide
What are InvITs?
Infrastructure Investment Trusts (InvITs) are investment vehicles introduced by SEBI to allow individuals to invest in large infrastructure assets such as roads, power transmission lines, pipelines, telecom towers, and renewable energy projects.
They work similarly to mutual funds but invest specifically in revenue-generating infrastructure projects.
👉 Simply put: InvITs let you earn regular income from India’s infrastructure growth without owning the asset directly.
Why Were InvITs Introduced in India?
To unlock capital stuck in long-term infrastructure projects
To help developers reduce debt
To give retail investors access to infrastructure income
To fund India’s massive infrastructure expansion (roads, power, green energy)
How InvITs Work (Simple Flow)
Infrastructure asset (highway, power line, etc.) generates revenue
Revenue flows to the InvIT
After expenses, most income is distributed to investors
Investors receive quarterly or half-yearly payouts
By regulation, at least 90% of cash flows must be distributed to unit holders.
Types of InvITs in India
1. Publicly Listed InvITs
Traded on National Stock Exchange of India (NSE) and BSE Limited
Available to retail investors
Transparent pricing and disclosures
Examples:
IRB InvIT Fund
PowerGrid InvIT
IndiGrid InvIT
✅ Best for individual investors
2. Private / Unlisted InvITs
Not listed on stock exchanges
High minimum investment (₹1 crore+)
Mainly for institutions and HNIs
Limited liquidity
❌ Not suitable for retail investors
3. Based on Asset Ownership Structure
a) Equity-based InvITs
Income from tolls, tariffs, or usage fees
Cash flows may vary with economic activity
Higher growth potential
b) Hybrid InvITs
Combination of equity + debt
More stable income with moderate growth
How Can You Invest in InvITs in India?
Method 1: Through Stock Market (Most Common)
Open a Demat & Trading Account
Search for listed InvITs on NSE/BSE
Buy units just like shares
Receive income directly in your bank account
💰 Minimum investment: ~₹10,000–₹15,000
Method 2: During IPO of an InvIT
Subscribe when an InvIT launches its IPO
Similar process to equity IPOs
Units later get listed on exchanges
Method 3: Through Mutual Funds / ETFs
Some debt or hybrid funds may have exposure to InvITs
Lower direct control but easier diversification
Returns from InvITs
Returns come from:
Interest income
Dividend income
Repayment of capital
📊 Typical annual yield: 8%–12% (can vary)
Returns are more income-oriented than growth-oriented.
Taxation of InvITs (Important)
Income Type | Tax Treatment |
|---|---|
Interest | Taxed as per slab |
Dividend | Taxed as per slab |
Capital repayment | Mostly tax-free |
Capital gains | Like equity (short/long term rules) |
📌 Taxation can be complex → always check payout breakup.
Advantages of InvITs
Regular cash flow
Lower volatility than stocks
Exposure to essential infrastructure
Professional management
Regulated by SEBI
Risks You Should Know
Interest rate risk
Traffic / usage risk (for toll roads)
Regulatory & policy risk
Limited capital appreciation
Liquidity risk during market stress
Who Should Invest in InvITs?
✔ Investors seeking steady income
✔ Retirees or conservative investors
✔ Portfolio diversification seekers
✔ Long-term investors (5–10 years)
❌ Not ideal for short-term traders or high-growth seekers
InvITs vs REITs (Quick Comparison)
Feature | InvIT | REIT |
|---|---|---|
Asset Type | Infrastructure | Real Estate |
Income | Tolls, tariffs | Rent |
Risk | Moderate | Low–Moderate |
Growth | Limited | Moderate |
Final Takeaway
InvITs are a powerful but underutilized investment option in India. They sit between fixed income and equity, offering stable returns with moderate risk, backed by India’s long-term infrastructure story.
If used wisely, InvITs can be an excellent income-generating pillar in your investment portfolio.
