What is InvITs?
Overview on InvITs
What is InvIT SPV/Holding Company?
Infrastructure assets are generally developed or held by infrastructure developers through separate
legal entities known as Special Purpose Vehicles (SPVs). SPVs can be set up in the form of a
company or a Limited Liability Partnership (LLP). Sometimes a two tier structure involving a holding
company (HoldCo) and SPVs is also used to develop multiple projects under different SPVs.
Which sectors can an InvIT invest into?
InvITs can invest in assets which fall under any of the sub-sectors included in the Harmonised Master
List of Infrastructure Sub-sectors, notified by Ministry of Finance from time to time.
What is the procedure of making an application for obtaining registration as a InvIT from
SEBI?
Application for registration as InvIT can be made through SEBI Intermediary Portal at
https://siportal.sebi.gov.in. The portal allows for filing of requisite information, uploading of
documents and payment of requisite fees. The portal also provides facility for various post-
registration filings and compliances.
The eligibility requirements for
The InvIT and parties to the InvIT are required to satisfy these criteria at all times. Some of the major
eligibility conditions are as follows:
(a) The trust deed is duly registered in India under the provisions of the Registration Act, 1908
(b) The trust deed has its main objective as undertaking activity of InvIT in accordance with InvIT
Regulations
(c) The responsibilities of the trustee, as prescribed under InvIT Regulations, have been included in
the trust deed
(d) Sponsor, Investment Manager and Trustee have been designated and are separate entities
(e) No unit holder enjoys superior voting or any other rights over another unit holder and there is only
a single class of units
(f) The parties to the InvIT are fit and proper persons
A registered InvIT is required to make initial offer of its units, through public issue or private
placement, within three years from the date of registration failing which it is required to
surrender its certificate of registration.
The following fees are charged by SEBI from the InvIT:
Application fee: INR 1 lakh
Registration fee: INR 10 lakh
Filing fee: 0.1% of the total issue size for initial and follow-on offer, 0.05% of the total size for
rights issue by public InvITs.
Types of InvITs permitted under InvIT Regulations
(a) Public InvITs: InvITs which offer units in the initial to public (i.e. all classes of investors) can be
categorised as public InvITs. Such units are required to be listed on recognised stock exchanges.
(b) Private listed InvITs: InvITs which offer units in the initial offer on private placement basis to
institutional investors and body corporates and such units are listed on recognised stock exchanges,
can be categorised as private listed InvITs.
(c) Private unlisted InvITs: InvITs which offer units in the initial offer on private placement basis to
institutional investors and body corporates, in terms of Chapter VIA of the InvIT Regulations and
such units are not permitted to be listed on recognised stock exchanges, can be categorised as private
listed InvITs.
How can an InvIT raise funds
InvIT can raise unit capital from investors through issuance of units via initial offer. Further unit
capital by the InvITs can be raised through issuance of units via follow-on offer, preferential issue,
institutional placement and rights issue of units.
InvITs can also raise debt capital through issuance of debt securities. Listed InvITs are required to list
the debt securities issued by them on recognised stock exchanges.
Who can invest in an InvIT?
All categories of investors are permitted to invest in units of Public InvITs. Private placement of units
(unlisted as well as listed) can be made only to institutional investors and body corporates. For the
purpose of InvIT Regulations, ‘institutional investor’ means the following:
i. a qualified institutional buyer; or
ii. family trust or systematically important NBFCs registered with RBI or
intermediaries registered with SEBI, all with net-worth of more than five hundred crore rupees, as per
the last audited financial statements.
How to invest in an InvIT?
Investors can make application for subscription of units in initial offer by InvITs. Post issuance and
listing of units on stock exchange(s), investors can invest in such InvITs in a manner similar to
investing in equity shares of listed companies.
Requirements for Trustee
(a) It is registered with SEBI as a Debenture Trustee
(b) It is not an associate of the sponsor or the Investment Manager
Requirements for Sponsor(s)
(a) It has a net worth/net-tangible assets of not less than INR 100 crores
(b) It has a sound track record in development of infrastructure or fund management in the
infrastructure sector
Requirements for Investment Manager (IM)
(a) It has a net worth/ net-tangible assets of not less than INR 10 crores
(b) It has not less than five years of experience in fund management or advisory services or
development in the infrastructure sector, or the combined experience of its
directors/partners/employees in fund management or advisory services or development in the
infrastructure sector is not less than 30 years
(c) It has not less than two employees with at least 5 years’ experience in fund management or
advisory services or development in the infrastructure sector
(d) It has not less than one employee with at least 5 years’ experience in the relevant sub-
sector(s) in which the InvIT has invested or proposes to invest
(e) Not less than half of its directors/members of the governing board are independent directors
(f) It has entered into an investment management agreement with the trustee
What are the rights of unit holders of an InvIT?
2 NDCF – net distributable cash flows The rights associated with ownership of units typically
available to unit holders of InvITs include the following:
Right to receive distributions
Right to attend and vote in meeting of unit holders
Right to request the trustee to take up specified matters for voting by unit holders
Right to redressal of grievances
Right to receive exit offer in case of specified transactions
Right to receive information required to be disclosed by the InvIT and in the manner, prescribed
under InvIT Regulations
Where can an investor look out for information on InvITs?
For more information on InvITs, one can refer to the following:
SEBI website (www.sebi.gov.in)
Regulatory framework including InvIT Regulations (link), circulars (link) issued thereunder
List of registered InvITs (link)
Offer documents of InvITs which have issued units through initial offer (link) (link)
Status of application for registration as InvIT (link)
Data on funds raised by InvITs (link) b) Stock Exchanges website
Disclosures made by listed InvITs c) Website of the respective InvIT
Information about the InvIT
Disclosures made by the InvIT
How can investors redress their complaints against InvITs?
Investor should first approach the concerned InvIT with their complaint. If the complaint remains
unresolved, the investors may approach SEBI for facilitating redressal of their complaints. SEBI has a
web based centralized grievance redress system called SEBI Complaint Redress System (SCORES)
available at http://scores.gov.in where investors can lodge their complaints against InvITs.
