Infrastructure Investment Trust (InvIT)

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Overview:

The Central government is working on a proposal to launch a fresh InvIT for national highways where domestic retail investors can hold units of the trust.

About Infrastructure Investment Trust (InvIT)

 

  • It is Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects 
  • These are like mutual funds in structure which can be established as a trust and registered with Sebi.
  • An InvIT has 4 parties namely; Trustee, Sponsor(s) and Investment Manager and Project Manager.
  • While the trustee (certified by Sebi) has the responsibility of inspecting the performance of an InvIT, sponsor(s) are promoters of the company that set up the InvIT.

 

What is NHAI InvIT?

  • It is the infrastructure investment trust sponsored by the National Highways Authority of India (NHAI) to support the government’s National Monetisation Pipeline (NMP).
  • It is a Trust established by NHAI under the Indian Trusts Act, 1882 and SEBI (Security and Exchange Board of India) regulations.

 

Key facts about National Highways Authority of India

  • It was constituted by an Act of Parliament in 1988 under the administrative control of the Ministry of Road Transport and Highways.
  • It has been set up as a Central Authority to develop, maintain and manage the National Highways entrusted to it by the Government of India.
  • The Authority consists of a full-time Chairman and not more than five full-time Members and four part-time Members who are appointed by the Central Government.

 


Q1) What is a mutual fund?

A mutual fund is a type of investment vehicle that pools money from many individual investors to invest in a diversified portfolio of stocks, bonds, or other securities. It is managed by a professional fund manager or a team of managers, who make investment decisions on behalf of the investors.

Source: India's first public InvIT for road, highway projects in the works