Q16. Consider the following statements related to InvITs
1. These are government bonds issued by the government to finance infrastructure projects
2. Only individuals are allowed to invest in these instruments.
Which of the above statements is/are correct?
Q16. Consider the following statements related to InvITs
1. These are government bonds issued by the government to finance infrastructure projects
2. Only individuals are allowed to invest in these instruments.
Which of the above statements is/are correct?
The correct option is D (d) None of the above
Infrastructure investment trusts, or InvITs, are instruments that work like mutual funds. InvITs are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. Part of this cash flow would be distributed as dividend back to investors.
Purpose of an InvIT : Often, infrastructure projects such as roads or highways take some time to generate steady cash flows. Meanwhile, the infrastructure company has to pay interest to banks for the loans taken by it. An InvIT essentially gives the company the leeway to fulfil its debt obligations quickly.
InvITs are formed by complying with the Sebi Infrastructure Investment Trust Regulation, 2014. The infrastructure company interested in getting funds from the public will, therefore, form this trust, and then appoint an investment manager who will be responsible for how the assets and investments of the InvIT are managed.
They are not meant for individual investors only.
(d) None of the above
Infrastructure investment trusts, or InvITs, are instruments that work like mutual funds. InvITs are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. Part of this cash flow would be distributed as dividend back to investors.
Purpose of an InvIT : Often, infrastructure projects such as roads or highways take some time to generate steady cash flows. Meanwhile, the infrastructure company has to pay interest to banks for the loans taken by it. An InvIT essentially gives the company the leeway to fulfil its debt obligations quickly.
InvITs are formed by complying with the Sebi Infrastructure Investment Trust Regulation, 2014. The infrastructure company interested in getting funds from the public will, therefore, form this trust, and then appoint an investment manager who will be responsible for how the assets and investments of the InvIT are managed.
They are not meant for individual investors only.
