Infrastructure Investment Trusts (InvITs) can invest in a project either directly or through special-purpose vehicles, the Securities and Exchange Board of India (Sebi) said on Sunday. However, in case of public-private partnership projects, such investments are only allowed through SPVs.
Sponsors of an InvIT need to collectively hold at least 25% of the total units for a minimum duration of three years with the proposed holding of not less than R500 crore. For investments through SPVs, an InvIT is guided to hold controlling interest or more than 50% of equity share capital.
The Sebi guidelines also draw borrowing directions for InvITs with the condition that the aggregated consolidated borrowings of a trust and underlying SPVs shall never exceed 49% of the value of the assets of the trust. For any borrowing exceeding 25% of the value of InvIT assets, credit rating and unitholders' approval is required. The norms identified different set of conditions to be met by InvITS, depending on the nature of the underlying investment and investment limits.
For instance, an InvIT that proposes to invest at least 80% of the value of the assets in the completed and revenue generating infrastructure assets is required to raise funds only through a public issue with a minimum 25% public float and at least 20 investors. The minimum investment size for this type of InvIT is set at R10 lakh crore with a trading lot of R5 lakh crore.