India's State-Run Oil And Gas Companies To Float InvITs To Monetise Their Pipeline Networks: ReportEngineers weld carbon steel pipes as part of a gas pipeline. (NOAH SEELAM/AFP/Getty Images)

Indian oil and gas companies are said to be looking to monetise the stakes in their pipeline networks using the Infrastructure Investment Trusts (InvITs), reports Livemint.

InvITs are 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.

According to the report, the three companies have prepared blueprints for floating InvITs.

The InvITs will reportedly house pipelines totalling 5,000 km. The companies may offload 26-49 per cent of their stakes in these projects.

“These pipelines are worth lakhs of crores of rupees and, to begin with, a minority stake would be offloaded. The companies may select one or two pipelines, to begin with. The condition, however, is that the companies retain the operations and control of the pipelines," a person aware of the development was quoted in the report as saying.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement