The government is developing a new framework that will permit small investors to fund infrastructure projects. Nitin Gadkari, the Union Minister for Road Transport and Highways, announced that the government would shortly list InvITs on stock exchanges so that ordinary investors may trade in InvIT units.

Gadkari stated at the Roads and Highways Summit, hosted by business organisation FICCI on Tuesday, “The government will shortly list InvITs on the stock market so that retail investors can trade units, creating an opportunity for average folks to invest in the infrastructure projects. According to the minister, InviTs provide a 7-8% return on an
annual basis.

Infrastructure Investment Trusts (InvITs) are financial instruments that follow the model of mutual funds. They are created to pool investor capital and invest in assets that generate cash flows over time. InviTs make road toll or power project investments. Mutual fund-like collective investment vehicles allow for direct investments of funds from individual and institutional investors in infrastructure projects in exchange for a small percentage of the income as a return.

Infrastructure asset developers can profit from their assets thanks to inviTs, which combine several assets under a single corporation (trust structure). The SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2016 govern InvITs in India. The government will approach the capital market next month to raise money for four road projects, according to the minister of transportation for roads. The funds would be raised through Infrastructure Investment Trusts (InviTs), and ordinary investors will be limited to investments of up to Rs. 10 lakhs.

He stated that the National Highways Authority of India (NHAI) would soon begin to monetise several road projects using InviTs and the toll-operate transfer (TOT) model.