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Business News/ News / India/  Mutual fund-like scheme for retail investors soon for investing in road projects: Nitin Gadkari
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Mutual fund-like scheme for retail investors soon for investing in road projects: Nitin Gadkari

The government is formulating a new model through which retail investors will be allowed to invest in infra projects

Gadkari said the government will soon list InvITs on stock exchanges so that retail investors can trade in units of InvITs.Premium
Gadkari said the government will soon list InvITs on stock exchanges so that retail investors can trade in units of InvITs.

The government is formulating a new model through which small investors will be allowed to invest in infrastructure projects. Union Road Transport and Highway Minister Nitin Gadkari said that the government will soon list InvITs on stock exchanges so that retail investors can trade in units of InvITs.

"The government will soon list InvITs on the stock market so that retail investors can trade units, offering an opportunity to common citizens to invest in the infrastructure projects, "said Gadkari while speaking at the Roads and Highways Summit, organised by industry body FICCI on Tuesday. The minister said the InvITs assure a 7 to 8% return on an annual basis.

What are InvITs

 

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. InvITs invest in either road toll projects or power projects.

The collective investment vehicles similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.

InvITs enable developers of infrastructure assets to monetise their assets by pooling multiple assets under a single entity (trust structure). In India, InvITs are governed by SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2016.

The Road Transport Minister also said that the government will approach the capital market next month to raise funds for four road projects. The money will be raised through Infrastructure Investment Trusts (InvITs), and there will be an investment limit of 10 lakh for retail investors.

"In the near future, National Highways Authority of India (NHAI) will be monetising various road projects through a mix of InvITs and toll-operate-transfer (TOT) model," he noted.

The minister further said that he has set a target to take the national highway network length to 2 lakh km by 2024. The total length of national highways (NHs) in the country has increased from about 91,287 km in April 2014 to about 1,40,937 km at the end of November 2021.

(With inputs from agencies)

 

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Published: 24 Aug 2022, 10:11 AM IST
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