Who Regulates The Infrastructure Investment Trust?

  Investment products like InvITs are risky too, and therefore, before you invest, it is important to know “who regulates Infrastructure Investment Trust?” 

In India, like other investment products, such as equity, mutual funds, etc, InvITs are also regulated by the Securities & Exchange Board of India (SEBI). 

This regulation ensures that all activities, from fundraising to distribution of income, follow strict guidelines for transparency and investor protection. 

Without a regulator, investors might hesitate to put money into such large-scale infrastructure projects.

Role of SEBI in Regulating InvITs

SEBI, India’s capital market regulator, introduced the InvITs framework in 2014. Its main goal was to channelize funds into infrastructure while giving investors an alternative investment avenue.

• Sets minimum investment requirements.
• Ensures InvITs distribute at least 90% of their income to investors.
• Make sure assets under InvITs are income-generating and stable.
• Protects retail and institutional investors with disclosure norms.

For example, an InvIT focused on roads might own a toll highway that is already operational and generating income, rather than a project that’s still under construction. This rule is in place to ensure stable and predictable returns for investors.

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Why Regulation Matters?

Regulation plays a crucial role in making InvITs a trustworthy and attractive investment option. Here’s why:

• Investor Confidence:

Listed InvITs, like Power Grid Infrastructure Investment Trust (PGInvIT), operate under SEBI’s strict regulatory framework. This ensures that operations are transparent and follow standard governance practices.

• Mandatory Income Distribution:
  

SEBI requires InvITs to distribute at least 90% of their net distributable cash flow to unitholders. This provides investors with a predictable and steady income stream.

• Transparency and Reporting:
  

InvITs must disclose financials, performance metrics, and project updates regularly. This level of transparency helps investors track their investments and reduces the risk of surprises.

• Stronger Governance:
  

Regulatory oversight ensures proper checks and balances, including independent trustees and audit requirements, protecting investors from mismanagement.

• Appealing to Both Retail and Institutional Investors:
  

With a clear regulatory framework, both small and large investors can participate confidently, knowing their rights and returns are safeguarded.

In short, SEBI regulation ensures that InvITs operate fairly, distribute income reliably, and provide transparency—making them a safer and more attractive investment choice.

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A Real-Life Example

Take the IRB InvITs Fund, India’s first listed InvITs. Backed by SEBI’s regulations, it attracted thousands of investors when launched. Because it owns operational toll roads, investors earn regular returns from toll collections. Without SEBI’s oversight, such large-scale participation might never have happened.

How to Invest in InvITs?

Now that we’ve seen that Infrastructure Investment Trusts (InvITs) are regulated by SEBI, let’s explore how you can invest in them:

• Listed InvITs: These are available on stock exchanges like NSE and BSE. You can purchase units through your Demat and trading account, similar to buying stocks.

• Private InvITs: Typically targeted at institutional investors, these require a minimum investment of ₹25 lakh, as per recent SEBI amendments.

• Investment Process:

  • Open a Demat and trading account with a registered broker.

  • Research and select InvITs that align with your investment goals.

  • Place buy orders for units of the chosen InvITs through your trading platform.

• Minimum Investment: For listed InvITs, the minimum investment is the price of one unit, which can vary. For private InvITs, the minimum investment is ₹25 lakh.

Start investing today and watch your money grow alongside India’s infrastructure development.

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If you are interested in investing in InvITs in India, then begin your journey now. To start begin the process of opening a Demat account with a reliable stockbroker.

Still confused about choosing the right stockbroker? Fill in your details in the form below:

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Conclusion

So, when someone asks, “Who regulates the Infrastructure Investment Trust?”, the clear answer is SEBI. 

Its strong regulatory framework not only protects investors but also supports India’s growing infrastructure needs. 

This makes InvITs a unique bridge between infrastructure development and wealth creation for everyday investors.

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FAQs

Q1.Who regulates the Infrastructure Investment Trust in India?

SEBI regulates all InvITs in India.

Q2.Why does SEBI regulate InvITs?

To ensure transparency, investor protection, and fair distribution of income.

Q3.Can retail investors invest in InvITs?

Yes, retail investors can participate, with a minimum investment requirement.

Q4.What happens if an InvIT doesn’t follow SEBI rules?

SEBI can impose penalties, restrict activities, or even cancel registration.

Q5.Do InvITs guarantee fixed returns?

No, returns depend on the performance of underlying infrastructure assets.