Do you agree with the ICRA report that there could be a spate of INVITs in India in the next few years?

There is no denying the fact that INVITs have a huge potential in India as infrastructure companies need a methodology to monetize their infrastructure assets and eventually operate more as infrastructure service providers in an asset light manner.

According to a report by ICRA, the Infrastructure Investment Trusts or INVITs are expected to acquire gross infrastructure assets to the tune of nearly Rs.400,000 crore over the next 5 years. This is going to be a huge boost to infrastructure project monetization.

At present, there are just about 6 INVITs that are active in India which have cumulatively managed to raise Rs.27,600 crore via the INVIT route. Shortly, Reliance Tower Infrastructure is expected to hit the market with a mega INVIT of Rs.25,200 crore and could be a game changer.

To understand the concept, INVITs are like debt funds but they are backed up by infrastructure assets instead of securities of debt and equity as in the case of mutual funds. INVITs are in demand by institutional investors. ICRA estimates that these INVITs could get significant long term money from pension funds and insurance companies in India and abroad.