With the minimum subscription amount for public in Infrastructure Investment Trusts (InvITs) brought down from Rs 1 lakh to the range of Rs 10,000 to Rs 15,000 and the minimum trading lot from 100 units to 1 unit – like Real estate investment trusts (REITs) – InvITs has become accessible to retail investors.
Before the changes were made on July 30, 2021, InvITs were out of reach of the retail investors, as the minimum investment requirements for trading was Rs 1 crore (that is a lot size of 100 units with the subscription amount of Rs 1 lakh per unit). Hence, retail investors willing to invest in real estate earlier had to do so either through REITs or fractional investments.
So, like investing in equity shares, now any investor – be it domestic or foreign, retail or institutional – can now invest in real estate through InvITs by opening a demat account to get the benefits from infrastructure and roadway projects.
So, if you want to include infrastructure in your investment portfolio, you may consider investing in InvITs.
After investing in an InvIT, as a unit holder, you will have the right to – receive returns through cash distributions made by the trust; participate on the matters related to acquisition of new assets and/or borrowing; appointment and removal of an investment manager and a sponsor; receive annual reports, valuation reports, reports on quarterly / semi-annual finances and other periodic disclosures.
Although investing in real estate through InvITs provides better transparency, due diligence is needed before making an investment decision as such an investment would result in capital gains along with regular income.
This is because, unless the assets under a trust are not good enough, the investment in an InvITs won’t be able to provide you the desired stability in return from the investment.