Infrastructure Investment Trust (InvITs)

Infrastructure investment trusts are investment instruments that work like mutual funds and are regulated by the Securities and Exchange Board of India.
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Infrastructure Investment Trust
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3 min
12-June-2026

Infrastructure Investment Trusts (InvITs) work in a way similar to mutual funds. They allow individuals and institutions to invest in infrastructure assets and earn returns from the income and profits generated by these projects. One of the most effective ways to build wealth is by identifying sectors with strong growth potential and investing in them. Among these, the infrastructure sector is one of the most important and rapidly expanding parts of India’s economy.

Infrastructure Investment Trusts (InvITs) provide investors with an opportunity to benefit from the growth of this sector. If you are wondering what Infrastructure Investment Trusts are and how they operate, this article will help you understand everything you need to know.



What is an Infrastructure Investment Trust (InvIT)?

An Infrastructure Investment Trust (InvIT) is a special investment vehicle that allows retail and institutional investors to directly invest in specific infrastructure projects. They work similarly to mutual funds, and when you invest in InvITs, you can earn a part of the income from the infrastructure projects as your return on investments.

InvITs are similar to Real Estate Investment Trusts (REITs), which invest in real estate projects. While this sums up the meaning of Infrastructure Investment Trusts, you may still be worried about the safety of investing in these vehicles. The good news is that InvITs are regulated by the Securities and Exchange Board of India (SEBI), so you can rest assured that your investments are transparent and secure.



Types of InvITs


 

Although all InvITs have the common objective of investing in infrastructure projects, there are different types of InvITs based on the type of projects in focus. Broadly, you can choose from the following two types of Infrastructure Investment Trusts:

InvITs that invest in completed revenue-generating projects

As the name indicates, these Infrastructure Investment Trusts invest primarily in completed infrastructure projects that have started to generate revenue. These are relatively safe because they have an established source of income. Units in such InvITs are available to investors via a public offer.

InvITs that invest in projects under construction

These Infrastructure Investment Trusts primarily choose to invest in ongoing infrastructure projects that are still in progress or under construction. However, investors may have to opt for private investment channels to purchase units in such InvITs. Additionally, they carry a slightly higher risk due to the ongoing or incomplete nature of the projects concerned.



Structure of InvITs in India


 

Infrastructure Investment Trusts in India have a tiered organisational structure that consists of the following parties or entities:

Sponsor: The sponsor is typically an infrastructure development company that is responsible for setting up the InvIT, identifying suitable investment projects and appointing the trustees. The sponsor’s net worth must be at least Rs. 100 crores.

Investment manager: The investment manager is responsible for overseeing and managing the investments made by the InvIT in different infrastructure projects. They may also oversee any new investments made by the InvIT.

Project manager: The project manager of an Infrastructure Investment Trust is in charge of developing, managing, and operating the infrastructure projects in which the InvIT has invested.

Trustee: The trustee is a SEBI-approved and registered company that is responsible for safeguarding investor interest, supervising the InvIT managers and distributing dividends to investors.



What is the main purpose of InvITs?


 

The main purpose of Infrastructure Investment Trusts is to facilitate investment in infrastructure projects by pooling together resources from various investors. InvITs provide a platform where developers can monetise their infrastructure assets, generate capital for new projects and reduce debt. Investors also benefit from regular income distributions and potential capital appreciation.

Ultimately, InvITs contribute to the growth of the infrastructure sector by improving liquidity and providing a regulated and transparent investment avenue. They also attract long-term investments into the infrastructure sector, thus supporting economic development and creating a strong infrastructure framework in the country.



Advantages of InvITs


 

Infrastructure Investment Trusts offer various benefits to investors. Check out the top reasons to add InvITs to your portfolio.

Diversification

InvITs offer the unique opportunity to diversify your portfolio to include private and public infrastructure projects. This area of investment is otherwise not accessible to retail investors.

Fixed income

Infrastructure Investment Trusts generally invest in stable revenue-generating projects like roadways, highways, pipelines and transmission lines. The dividend paid by InvITs can serve as a reliable source of additional or alternate income.

Liquidity

Since the units of Infrastructure Investment Trusts are listed on stock exchanges, it is generally easy to buy or sell them. This makes InvITs fairly liquid investment options when compared to other schemes that have a lock-in period.

Reliable Asset Management

The assets under management in an InvIT are overseen by skilled experts who have years of experience in this field. By choosing Infrastructure Investment Trusts, you can also benefit from the professional expertise of these fund managers.

Investors

Infrastructure Investment Trusts also benefit investors by offering them fixed returns on their investments. Since InvITs are mandated to distribute at least 90% of their income via dividends, investors can enjoy a steady stream of alternative income from profitable infrastructure companies.

Promoters

Promoters of Infrastructure Investment Trusts are also benefited as they can reduce the burden of debt substantially. The proceeds can also be redirected to other projects and ventures.



Risks associated with InvITs


 

Infrastructure Investment Trusts also have some limitations that you should be aware of. These risks are outlined below.

Regulatory risk

Changes in regulations like tax laws and infrastructure-related policies can affect the revenue to infrastructure companies and, in turn, the returns from InvITs.

Inflation risk

Inflation risk may lead to increased operational costs for infrastructure companies. This could also affect the returns earned by infrastructure projects and, consequently, the returns for investors.

Asset risk

If the underlying infrastructure assets underperform, the potential for financial loss is compounded. This may arise due to operational issues, regulatory changes or economic downturns that affect revenue generation.

Who should invest in InvITs

If you are not sure whether InvITs may be suitable for your financial goals and risk tolerance levels, here are some pointers to help resolve your dilemma. Ideally, InvITs may be suitable for you if you:

  • Want to invest in the infrastructure sector
  • Aim for long-term growth with regular income
  • Desire portfolio diversification beyond stocks and bonds
  • Can handle the specific risks of infrastructure investments.
  • Want professional management and transparency in your investments
  • Have a moderate to high-risk tolerance.
  • Want to invest in the growth of the infrastructure sector

  • Prefer investments that are tradable on stock exchanges for liquidity



Prospects of InvITs in India


 

InvITs are becoming increasingly popular in India. The total fundraising via the 24 InvITs (and the REITs) in the country grew 14x in FY24. Looking ahead, Infrastructure Investment Trusts appear to have excellent prospects due to the following reasons:

  • Reliable refinancing for ongoing infrastructure projects
  • Freeing up developers’ capital so it can be redirected to new infrastructure schemes

  • Opening up the infrastructure sector to international investors



InvITs vs REITs


 

Infrastructure Investment Trusts and Real Estate Investment Trusts are quite similar in many ways. Nevertheless, they also come with certain differences, as outlined below.

Growth

The growth prospects of InvITs depend on the success and continuation of the infrastructure projects in the trust’s asset basket. For REITs, however, the growth prospects depend on the acquisition of new real estate properties.

Liquidity

Although both types of investments are fairly liquid, InvITs may be slightly more so. This is because of their higher trading ticket size, which tends to attract larger investors. However, REITs may be more accessible to small-time investors.

Stability of income

The income from InvITs depends on the usage of the infrastructure facilities and on how scalable the tariffs involved are. So, there is a degree of ambiguity involved in income from InvITs. On the other hand, REITs may offer stabler income due to the reliability and regularity of rental earnings.

Risks

Unlike REITs, InvITs are more exposed to regulatory risk and political risks. So, if you are choosing between InvITs and REITs, you need to keep this in mind.



Conclusion


 

Infrastructure Investment Trusts can be an excellent addition to your financial portfolio. If you are looking for more ways to diversify your investments into sectors beyond infrastructure, sectoral mutual fund schemes may be suitable options.



On the Bajaj Broking website, you can find over 4,000 mutual funds of different categories and varieties, including sectoral and thematic funds. All you need to do is explore top-performing mutual funds on this platform, make a choice between lumpsum investment and SIP investments, and begin your investment journey with ease.



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Frequently asked questions

What is the concept of InvIT?
The core concept of Infrastructure Investment Trusts is to make it possible for investors to directly benefit from the profits or the revenue earned by infrastructure projects.
Which InvIT is best in India?
There are over 20 Infrastructure Investment Trusts in India. To find the best InvIT for your portfolio, you can compare the underlying assets, loan-to-value ratio, dividend yield and other factors and make a decision.
Which is the first InvIT in India?
The first InvIT to be launched in India was the IRB InvIT Fund, which has been valid and in operation since March 14, 2016.
How many InvITs are listed in India?

India has 29 SEBI-registered Infrastructure Investment Trusts (InvITs) as of September 2025. Out of these, 6 InvITs are publicly listed and traded on stock exchanges, allowing retail investors to buy and sell their units like shares.

InvITs are investment vehicles that own and operate infrastructure assets such as highways, power transmission networks, telecom towers, and renewable energy projects. They generate income from these assets and distribute a significant portion of the cash flows to investors. InvITs are regulated by the Securities and Exchange Board of India.

Is investing in InvIT good or bad?

Investing in Infrastructure Investment Trusts (InvITs) can be a good option for investors seeking regular income and portfolio diversification. InvITs invest in income-generating infrastructure assets such as roads, power transmission lines, and telecom towers. They often provide stable cash flows through periodic distributions. However, returns are influenced by factors such as interest rates, regulatory changes, and the performance of underlying assets. Like any investment, InvITs carry risks, so investors should assess their financial goals, risk tolerance, and investment horizon before investing.

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