InvITs- A New Investment Gateway for Infrastructure Growth in India - PowerPoint PPT Presentation

About This Presentation
Title:

InvITs- A New Investment Gateway for Infrastructure Growth in India

Description:

Large scale, efficient Infrastructure is the basic requirement for any economy to function competitively. This is also essential to maintain and updated these infra for continuous growth and smooth running of economy. – PowerPoint PPT presentation

Number of Views:221
Slides: 7
Provided by: taxmann
Category: Other

less

Transcript and Presenter's Notes

Title: InvITs- A New Investment Gateway for Infrastructure Growth in India


1
Customer Care No. 91-11-45562222
InvITs- A New Investment Gateway for
Infrastructure Growth in India
www.taxmann.com
2
  • Introduction
  • 1. Large scale, efficient Infrastructure is the
    basic requirement for any economy to function
    competitively. This is also essential to maintain
    and updated these infra for continuous growth and
    smooth running of economy.
  • With the vision of Make in India, our Prime
    Minister has given much emphasis on
    infrastructure growth and taking various steps to
    revive the sector. Several infrastructure
    projects which are under development in India are
    on hold or delayed due to various reasons. These
    infra systems are high-cost investments.
  • The infrastructure projects comprising roads and
    highways, ports, power, Communication and water
    sanitation projects etc. have been facing severe
    liquidity crunch due to the limited funding
    options, high interest cost and lack of investor
    interest. Witnessing the requirement for
    infrastructure in a country like India coupled
    with the huge funding requirements of the
    infrastructure developers, the structure of InvIT
    seems to be a much needed and a welcome
    introduction.
  • Finance Minister Mr. Arun Jaitely announces
    exemption from dividend distribution tax(DDT) by
    a domestic company to business trust(InvITs) in
    his speech in Budget 2016 . This announcement has
    suddenly given momentum to attract investor in
    Infra companies.

Customer Care No. 91-11-45562222
www.taxmann.com
3
  • What was the Necessity of InvITs?
  • 2. Infrastructure projects require huge capital
    with long term involvement. Any delay or failure
    in project may sink entire fund therefore
    investor refrain from this sector moreover small
    investor cannot participate with the vision of
    earning on investment. The major reason for
    envision of InvITs are as follows
  • 2.1 Providing wider and long-term re-finance for
    existing infrastructure projects.
  • 2.2 Unlocking of tied up capital
  • 2.3 Attracting foreign funding
  • 2.5 Diversity of portfolio
  • What is InvITs?
  • 3.1 Infrastructure Investment trust (InvITs) are
    another form of mutual fund which enable small
    investor to invest in infrastructure sector. As
    the name implies, infrastructure investment trust
    invest pooled money of investor in the sector and
    give return in the form of dividend to their unit
    holders.
  • InvITs can participate in investment directly or
    thru SPVs but in case of PPP model investment can
    be made only via SPVs.



Customer Care No. 91-11-45562222
www.taxmann.com
4
  • InvITs are regulated by SEBI (Infrastructure
    Investment Trusts) Regulation, 2014. Projects
    which will qualify in the definition of
    Infrastructure have been cited in notification
    dated 07.10.2013 issued by Ministry of Finance).
  • Types of InvITs
  • 4.1 InvITs have been allowed to invest in two
    categories
  • a. Investment in completed and projects having
    revenue
  • b. Investment in projects which are under
    construction
  • Registration and Structure of InvITs
  • 5.1 As per InvITs regulation, InvIT shall obtain
    a registration from SEBI in a manner as
    prescribed. A trust will be formed and registered
    for InvIT operation. An application for grant of
    certificate of registration as InvIT shall be
    made by the sponsor in Form A as specified in the
    Schedule I and shall be accompanied by a
    non-refundable application fee as specified in
    Schedule II..The trust deed must have main
    objective of under taking InvIT in accordance
    with the InvIT regulation.

www.taxmann.com
Customer Care No. 91-11-45562222
5
  • Functionaries of InvIT
  • 6.1 An InvIT has 4 parties such as Sponsor(s),
    Trustee, Investment Manager and Project Manager.
  • Sponsor Sponsor means any company or LLP or body
    corporate which sets up the InvIT and is
    designated as such at the time of application
    made to the Board and in case of PPP projects,
    shall mean the infrastructure developer or a
    special purpose vehicle holding concession
    agreement.
  • InvIT shall have maximum 3 sponsors. Minimum 100
    croresnet worth require for eligibility of
    sponsor. Sponsor(s), collectively, have to hold
    atleast 25 in the InvIT for atleast 3 years from
    the date of listing,
  • Trustee  The Trustee shall be registered with
    SEBI under the SEBI (Debenture Trustees)
    Regulations, 1993. Trustee should not be
    associated with Sponsor's .The trustee will play
    role of supervisor and look after activities of
    Investment manager. Trustee ensure that
    investment manager makes timely payment of
    dividend to unit holders
  • Investment Manager Investment Managers manage
    assets and investments of the InvIT and
    undertakes activities of the InvIT. Networth of
    minimum 10 crores 5 years of experience in fund
    management/advisory services, development in
    infrastructure sectorrequire for eligibility of
    Investment manager.
  • Project Manager  Project Manager means the
    person who is appointed by InvIT for execution of
    project within time frame. He shall conduct
    management of operational assets as per
    agreement. He will also ensure progress of under
    construction projects, their developments,
    approval status and such other aspects.

Customer Care No. 91-11-45562222
www.taxmann.com
6
To read more, please click here
Customer Care No. 91-11-45562222
www.taxmann.com
Write a Comment
User Comments (0)
About PowerShow.com