Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India's overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Hence, there exist a compelling case for ensuring flow of fresh and regular capital to the currently cash starved infrastructure sector.
Considering the above and with an aim to provide a suitable platform for financing / refinancing infrastructure projects and allow the investors to participate in the growth story of infrastructure, the Government introduced a new investment vehicle named Infrastructure Investment Trusts ('InvITs') in 2014.
In terms of the InvIT Regulations, the InvIT requires to be set up as a Trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908. The trust deed should have its main objective as undertaking activity of InvIT in accordance with the InvIT Regulations and shall include the responsibilities of the Trustee in terms of the InvIT Regulations. The InvIT shall have a (i) Trustee, (ii) Sponsor(s), (iii) Investment Manager and (iv) Project Manager, all being separate entities.
The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014. SEBI has vide its circular CIR/IMD/DF/55/2016 dated May 11, 2016 provided the detailed guidelines for the public issue of units of InvITs.
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