InvITs

The InvIT, Cube Highways Trust, will raise Rs 3,803 cr in fresh capital and Rs 1,423 cr by way of secondary share sale by sponsor Cube

Higher yields on bonds, lack of new launches, limited availability and awareness among investors have made emerging investment instruments REITs and InvITs less attractive with fundraising hitting an all-time low at Rs 1,166 crore in 2022-23. Going forward, a change in the tax rule on distributions classified as repayment could lead to a substantial increase in tax liability as it will be taxed as 'other income' in the hands of the investor, making the instruments less attractive, Manavi Prabhu, Head Fixed Income, Anand Rathi Shares and Stock Brokers, said. These assets will have to either generate better underlying yields or will have to reduce the price to ensure that they are more attractive than existing fixed-income investment options, he added. According to data compiled by Prime Database.com, a total of Rs 1,166 crore was mobilised by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) together in 2022-23. In comparison, Rs 13,841 crore was ..

In a relief to REITs and InVITs, the Finance Bill on Friday proposed to treat distribution from business as return of capital. While presenting the Union Budget on February 1, the government had proposed to tax income distributed by business trusts like REITs and InVITs in the form of debt repayments at the hands of unitholders. However, the government on Friday proposed to soften the tax impact on Real estate investment trusts (REITs) and Infrastructure investment trusts (InVITs) through amendments to the Finance Bill 2023. The Bill has been approved by the Lok Sabha. The Finance Bill had earlier proposed to tax distribution from business trust as income from other sources at applicable rate. "This is now proposed to be treated as return of capital, i.e reduction from cost of acquisition, till the cost at which the unit was issued," an official said. However, any amount in excess of the issue price would be taxable as income. Thus, the change would benefit the unitholders vis-a

Capital markets regulator Sebi on Thursday extended the timeline till March 15, for submission of public comments on a proposal pertaining to higher responsibility for sponsors of investment vehicles -- REITs and InvITs. The regulator had put in place a consultation paper on holding of sponsors in Real Estate Investment Trust (REITs) and Infrastructure Investment Trust (InvITs) on February 23 and sought public comments on the same by March 8. "It has been decided to extend the timeline for submission of comments to March 15, 2023," the Securities and Exchange Board of India (Sebi) said in a public notice. In its consultation paper, the regulator proposed changes to rules governing REITs and InvITs whereby sponsors will be required to own a certain percentage of units in these investment vehicles. The changes were proposed keeping in mind the interest of unit holders and the structural vulnerabilities associated with absence of a sponsor for REITs and InvITs. The watchdog suggested

Apart from being a pocket-friendly investment avenue, it also does away with the hassles of property management such as rent collection and maintenance

Other foreign investors likely to face significantly higher taxation on cashflow distribution too

Sebi on Thursday proposed to allow REITs and InvITs to issue depository receipts to provide foreign investors an opportunity to participate in the units of Indian emerging investment instruments. This will be beneficial for foreign investors as depository receipts (DR) avoids the need to trade directly with the Indian stock exchange, the Securities and Exchange Board of India (Sebi) said in a consultation paper. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are set up as Business Trusts and hold and operate revenue-generating real estate or infrastructure assets, respectively. REITs and InvITs raise funds by issuing units to the public at large. REITs and InvITs do not have multiple schemes or classes of units. The units are denominated in Indian rupees and the units are also required to be listed on a recognised stock exchange in India. "Permitting issuance of Depository Receipts against units of REITs and InvITs which are listed on a foreign

Seeking to widen the tax base, the government on Wednesday proposed to tax income distributed by business trusts like REITs and InVITs in the form of debt repayments at the hands of unitholders. "It is proposed to tax distributed income by business trusts in the hands of a unit holder (other than dividend, interest or rent which is already taxable) on which tax is currently avoided both in the hands of unit holder as well as in the hands of business trust," Finance Minister Nirmala Sitharaman said in her Budget speech on Wednesday. The move is aimed at widening the tax base. Explaining the move in the memorandum of the Finance Bill, the government said that interest, dividend and rental income have been accorded a pass-through status at the level of business trust and are taxable in the hands of the unit holder. "However, in respect of the distributions made by the business trust to its unit holders which are shown as repayment of debt, it is actually an income of unit holder which

Infrastructure investment trust India Grid Trust and G R Infraprojects have joined hands to bid for identified power transmission projects worth Rs 5,000 crore. "India Grid Trust (IndiGrid), India's first listed power sector infrastructure investment trust (InvIT) and G R Infraprojects Ltd (GRIL), one of India's leading players in Infrastructure sector, have announced a strategic partnership in the Indian power transmission sector," an IndiGrid statement said. An agreement has been signed to jointly bid for identified TBCB (Tariff Based Competitive Bidding) transmission projects aggregating to approximately Rs 5,000 crore, it stated. The power ministry has recently unveiled a plan for investment of Rs 2,50,000 crore in building transmission infrastructure for meeting the vision of 500 GW of renewable energy capacity by 2030 to meet its energy transition goal. There is a meaningful opportunity for private sector to participate in the journey of energy transition and shape the future

Union Minister Nitin Gadkari on Friday said the retail component in NHAI's InVIT bonds will be doubled to 50 per cent. Speaking at a meeting held here virtually, the Union minister for road transport and highways said the debut issue of the National Highway Authority of India (NHAI) infrastructure investment trust (InVIT) got a good response, and every common citizen of the country can play a role in nation building by helping finance the infrastructure. "We have reserved 25 per cent of InVIT bond for retail investors. Now we are planning to increase this limit to 50 per cent," Gadkari said. Citizens can invest anything upward of Rs 10,000 and get a return of 8.5 per cent per annum on their investments, Gadkari said, thanking the investor community for the over subscription of seven times in the maiden bond issuance of Rs 1,500 crore which listed last month. Speaking to an audience comprising institutional investors, the minister made a plea for more money saying the government's .

Enthused by the overwhelming retail investor response to the recent InvIT from NHAI, wherein NCDs worth Rs 1,430 crore were issued, Union Highways Minister Nitin Gadkari on Friday said the retail portion will go up in new such fund-raising ahead. The minister was addressing a gathering at BSE after listing the second tranche of the NHAI Infrastructure Investment Trust (InvIT) and NCD, which earlier this month raised Rs 1,430 crore and the issue was oversubscribed nearly seven times. As much as 25 per cent of the issue was reserved for retail investors, but NHAI had not said how many times the retail portion was oversubscribed instead saying it had an overwhelming response. Infrastructure investment trusts are instruments on the pattern of mutual funds, designed to pool money from investors and invest in assets that will provide cash flows over a period of time. "We want more and more general public to invest in these InvITs, I mean in our roads, and I can assure you that NHAI's roa

NHAI's Infrastructure Investment Trust (InvIT) which has been oversubscribed by about five times will be listed on the Bombay Stock Exchange on Friday. Infrastructure Investment Trusts are instruments on the pattern of mutual funds, designed to pool money from investors and invest in assets that will provide cash flows over a period of time. "The round#2 of InvIT has been oversubscribed almost 5 times in 10 per cent of the scheduled tenure," the Ministry of Road Transport & Highways said in a statement on Thursday. Tomorrow is the historic day as these InvIT NCDs will be listed on BSE and Road Transport and Highways Minister Nitin Gadkari will ring the bell marking a great beginning for public participation in infra funding, the statement said. "This round is special because 25 per cent of the non convertible debentures (NCDs) are reserved for retail investors," the statement said. With this option retired citizens, salaried individuals, small and medium business owners have a ..

Talks underway with Sebi to make private-listed InvIT into public

The National Highways Infra Trust (NHAI InvIT) has raised Rs 1,430 crore from domestic and international investors, through placement of its units, for part funding its acquisition of three road projects from NHAI, an official statement said. NHAI InvIT is the infrastructure investment trust sponsored by the National Highway Authority of India (NHAI) to support the government's National Monetisation Pipeline (NMP). Infrastructure Investment Trusts (InvITs) are instruments on the pattern of mutual funds, designed to pool money from investors and invest in assets that will provide cash flows over a period of time The Ministry of Road Transport and Highways (MoRTH) in a statement said the units have been subscribed by a gamut of institutional investors, including Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan Board, State Bank of India, SBI Pension Fund, SBI Mutual Fund, IOCL Employee Provident Fund, L&T and Staff Provident Fund, among others. According to the ..

The Infrastructure Investment Trust (InvIT) is planning to raise Rs 2,000 crore from investors to acquire two to three road assests from its parent firm

Capital markets regulator Sebi on Wednesday came out with guidelines pertaining to preferential issues and institutional placement of units by emerging investment vehicles -- REIT and InvIT. The regulator has specified the manner of issuance of units under preferential issue as well as institutional placement by listed real estate investment trust (REIT) and infrastructure investment trust (InvIT), according to two separate circulars. With regard to the issuance of units under institutional placement, Sebi said that no allotment will be made, either directly or indirectly, to any institutional investor, who is a sponsor or manager or is a person related to, or related party or associate of the sponsor or the manager. However, the allotment of units can be made to the sponsor for unsubscribed portion in the institutional placement where at least 90 per cent of the issue size has been subscribed, the object of the issue is the acquisition of assets from that sponsor and unit-holders .

Capital markets regulator Sebi on Thursday allowed emerging investment vehicles, Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT), to issue commercial papers. This is subject to certain conditions, the Securities and Exchange Board of India (Sebi) said in two separate circulars. The move came after Reserve Bank Commercial Paper Directions last month indicated that InvIT and REIT having net worth of at least Rs 100 crore are eligible to issue commercial paper. The capital markets regulator said that REITs and InvITs may issue listed commercial papers. This is subject to certain conditions, including, REITs and InvITs need to abide by the guidelines prescribed by Reserve Bank of India (RBI) for issuances of commercial papers and follow the conditions of listing norms prescribed by Sebi. The issuance of listed CPs should be within the overall debt limit permitted under the REITs and InvITs rules, Sebi said. Commercial Paper or CP in market parlance refe

InvITs are collective investment vehicles that allow direct investments from individual and institutional investors in infrastructure projects, and give them a small portion of the income in returns

Sebi on Monday overhauled the pricing norms for preferential allotment of units by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Under the new framework, the pricing formula for allotment of units under preferential issue would be the Volume-Weighted Average Price (VWAP) of weekly highs and lows for 90 trading days or 10 trading days, whichever is higher. At present, the pricing formula in a preferential allotment is the VWAP of the last two weeks or the last 26 weeks, whichever is higher. The preferential issue of units to "institutional investors" not exceeding five will have to be made at a price not less than the 10 trading days' VWAP of the related units quoted on a stock exchange preceding the relevant date, according to two separate circulars. The regulator said the preferential issue of units would not be made to any person who has sold or transferred any units of the issuer during the 90 trading days preceding the relevant date. At th

Govt to approach capital markets next month to raise funds for four road projects: Gadkari