6 myths to guard against while investing in InvITs

Understanding InvITs correctly will empower investors to take informed investment decisions

InvITs are instruments for infrastructure developers to raise capital. For investors, InvITs provide (1) an opportunity to invest in a de-risked portfolio of operating infrastructure assets for a superior risk-adjusted return, (2) potential of growth via acquisitions.
 
The governance framework behind InvITs builds on the experience of similar instruments (that is, YieldCos, Master Limited Partnerships or MLP, REITs etc) that have been around for many decades in developed markets such as the USA, UK, Australia, Singapore and Hong Kong.
 
In the context of India’s capital market, we believe instruments like InvITs and REITs are currently under-researched and underappreciated.