IRB InvIT: Good, but not for all

The instrument should deliver a decent 10 per cent post-tax yield

With every initial public offering (IPO), getting the kind of response it is, the interest in IRB Infrastructure’s infrastructure investment trust (InvIT) issuance appears good. Being the first-of -its-kind IPO has helped generate reasonable investor interest. But it is also expected to deliver reasonable returns and a steady flow of income. Nonetheless, it is important to gauge how an InvIT works to understand if it would suit an investors’ risk profile.

How does an InvIT works?

InvIT is a pool of infrastructure assets which may be related to the road or power sector. In IRB’s case, it is constituted by