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With reference to the Infrastructure Investment Trusts (InvITs), consider the following statements:
1. They enable the direct investment of money from individual/institutional investors in infrastructure.
2. They are regulated and oversight by the Reserve Bank of India.
2. They are regulated and oversight by the Reserve Bank of India.
Which of the statement given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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With reference to the Infrastructure Investment Trusts (InvITs), consi...
In News- The Cabinet Committee on Economic Affairs approved monetisation of assets of POWERGRID through the Infrastructure Investment Trust (InvIT) model.
Statement 1 is correct: An Infrastructure Investment Trust (InvITs) is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as a return. InvITs work like mutual funds or real estate investment trusts (REITs) in features. InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.
Statement 2 is not correct: They are regulated by the Securities and Exchange Board of India. Their units are listed on different trading platforms like stock exchanges and are a wholesome combination of both equity and debt instruments. InvITs can be established as a trust and registered with Sebi. An InvIT consists of four elements: 1) Trustee, 2) Sponsor(s), 3) Investment Manager and 4) Project Manager.
Statement 1 is correct: An Infrastructure Investment Trust (InvITs) is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as a return. InvITs work like mutual funds or real estate investment trusts (REITs) in features. InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.
Statement 2 is not correct: They are regulated by the Securities and Exchange Board of India. Their units are listed on different trading platforms like stock exchanges and are a wholesome combination of both equity and debt instruments. InvITs can be established as a trust and registered with Sebi. An InvIT consists of four elements: 1) Trustee, 2) Sponsor(s), 3) Investment Manager and 4) Project Manager.
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With reference to the Infrastructure Investment Trusts (InvITs), consi...
Explanation:
Direct Investment in Infrastructure:
- The first statement is correct as Infrastructure Investment Trusts (InvITs) enable individual and institutional investors to invest directly in infrastructure projects.
- InvITs are designed to pool money from investors to invest in infrastructure projects, such as roads, bridges, and power plants, providing them with an opportunity to earn returns from these investments.
Regulation by RBI:
- The second statement is incorrect as InvITs are regulated and overseen by the Securities and Exchange Board of India (SEBI), not by the Reserve Bank of India (RBI).
- SEBI is the regulatory authority that governs the functioning of InvITs and ensures compliance with regulations to protect the interests of investors.
Therefore, the correct answer is option 'A' - 1 only, as the first statement accurately describes the role of Infrastructure Investment Trusts in facilitating direct investments in infrastructure projects.
Direct Investment in Infrastructure:
- The first statement is correct as Infrastructure Investment Trusts (InvITs) enable individual and institutional investors to invest directly in infrastructure projects.
- InvITs are designed to pool money from investors to invest in infrastructure projects, such as roads, bridges, and power plants, providing them with an opportunity to earn returns from these investments.
Regulation by RBI:
- The second statement is incorrect as InvITs are regulated and overseen by the Securities and Exchange Board of India (SEBI), not by the Reserve Bank of India (RBI).
- SEBI is the regulatory authority that governs the functioning of InvITs and ensures compliance with regulations to protect the interests of investors.
Therefore, the correct answer is option 'A' - 1 only, as the first statement accurately describes the role of Infrastructure Investment Trusts in facilitating direct investments in infrastructure projects.
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With reference to the Infrastructure Investment Trusts (InvITs), consider the following statements:1. They enable the direct investment of money from individual/institutional investors in infrastructure.2. They are regulated and oversight by the Reserve Bank of India.Which of the statement given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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