Context:
According to a report by Knight Frank India, the combined Assets Under Management (AUM) of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) in India have shown remarkable growth over the last five years.
InvITs (Infrastructure Investment Trusts)
- InvITs are collective investment vehicles that pool money from investors to invest in infrastructure projects (roads, power transmission lines, renewable energy, pipelines, etc.).
- They provide a way for retail and institutional investors to invest in long-term infrastructure assets that generate stable cash flows.
Key Features:
- Regulated by SEBI (Infrastructure Investment Trusts) Regulations, 2014.
- Investors receive returns from tolls, tariffs, annuities, or usage fees collected from infrastructure assets.
- Units are listed and traded on stock exchanges.
REITs (Real Estate Investment Trusts)
- REITs are pooled investment vehicles that allow investors to invest in commercial real estate properties (office spaces, malls, hotels, warehouses, etc.).
- They help small investors access real estate markets without needing to directly buy property.
Key Features:
- Regulated by SEBI (Real Estate Investment Trusts) Regulations, 2014.
- Like InvITs, REITs must distribute at least 90% of net distributable cash flows.
- Units are listed on exchanges, providing liquidity and transparency.
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