Indian States Eye InvITs To Monetise Infrastructure Assets, Inspired By Centre’s Model

Several Indian states are preparing to embrace infrastructure investment trusts (InvITs) as a new way to monetise public assets, taking a cue from the federal government’s success with the model.

According to a Reuters report, states including Maharashtra, Gujarat and Tamil Nadu are working on launching their own InvITs, while Rajasthan is in advanced discussions with the National Highways Authority of India (NHAI) to fold its assets into a centrally managed road fund.

InvITs function much like mutual funds, allowing both individual and institutional investors to directly invest in infrastructure projects.

Investors earn income from project revenues as well as capital gains from the appreciation of InvIT units.

For governments, InvITs offer a way to recycle capital, freeing up funds for new projects without relying entirely on traditional borrowing.

The model has gained momentum nationally. Data from the Bharat InvITs Association (BIA) shows that as of March-end, InvITs managed assets worth more than 7 trillion rupees ($78.86 billion), with a market capitalisation of 2.40 trillion rupees.

“The move will attract a wider investor base, deepen market participation, and create fresh opportunities for long-term capital,” NS Venkatesh, CEO of BIA was quoted as saying.

He added that state-level trusts could broaden the sector’s scope “…with the possible addition of newer sectors such as ports, sewage and water treatment plants, and urban and railway infrastructure”.

Some states have also initiated early talks with the National Bank for Financing Infrastructure and Development (NaBFID) to support their proposed trusts, the report stated.

The Centre itself has monetised assets worth 926.3 billion rupees in the last five years through models like toll-operate-transfer (TOT) and its own InvIT launched in 2022.

Please click here to add Swarajya as your preferred and trusted news source on Google

Also Read: Centre Keen On Combined Road And Rail Tunnel Projects, Asks Ministries To Work Together: Report