Should stock market investors invest in InvITs? LGT Wealth's Vislavath answers

Mint

3 days ago

As markets lurch from optimism to uncertainty, Indian family offices are quietly rewriting their investment playbooks. There is a gradual shift to private markets from traditional equity-debt allocations, not as fringe experiments but as core holdings that deliver stability, yield, and long-term purpose.
As Indian family offices and institutional portfolios become more sophisticated, the hunt for reliable, inflation-resilient income has intensified. In current landscape, one asset class that is quietly gathering momentum is Infrastructure Investment Trusts (InvITs).
Infrastructure Investment Trusts (InvITs) are specialized investment vehicles that own & manage infrastructure assets like roads, power plants, transmission lines, warehouses, ports, etc. They pool capital from a diverse base of investors, including institutional entities and individual investors. They can be traded publicly on stock exchanges or privately held.
India now hosts ₹ 7 lakh crore in InvIT assets, mostly across roads, telecom infrastructure, power transmission and renewables. What began as a regulatory experiment in 2014 has evolved into a yield-generating, low-volatility access point to long-duration, operating infrastructure assets. Recent policy tailwinds from the National Monetisation Pipeline to SEBI's liberalised listing rules have unlocked new issuance, including fibre and solar-backed InvITs. Predictable Yields : Investors receive regular distributions sourced from toll collections, regulated tariffs, or long-term PPAs. Listed InvITs typically yield 8-11%, while privately placed trusts offer 12-14%+ often with seniority, asset security, and downside protection built in.
: Investors receive regular distributions sourced from toll collections, regulated tariffs, or long-term PPAs. Listed InvITs typically yield 8-11%, while privately placed trusts offer 12-14%+ often with seniority, asset security, and downside protection built in. Asset-Backed Stability : Backed by operating assets, not forward bets and with limited correlation to equity market drawdowns. SEBI regulations mandate80% of an InvIT's total assets must be in completed and revenue-generating infrastructure projects.
: Backed by operating assets, not forward bets and with limited correlation to equity market drawdowns. SEBI regulations mandate80% of an InvIT's total assets must be in completed and revenue-generating infrastructure projects. Access to Scale : Emerging private InvITs allow co-investment into large, institutional-grade infra pipelinesbacked by seasoned sponsors - Brookfield, Reliance, KKR, GIC, NHAI - who are increasingly monetising mature assets via these vehicles.
: Emerging private InvITs allow co-investment into large, institutional-grade infra pipelinesbacked by seasoned sponsors - Brookfield, Reliance, KKR, GIC, NHAI - who are increasingly monetising mature assets via these vehicles. Diversification within Alternatives: Complements private credit, equity and RE by offering real asset-backed income with longer duration.
When evaluating an InvIT, consider the quality of underlying assets, longer concession periods, and low Loan-to-Value (LTV) for stability. A strong dividend yield, robust asset pipeline, and solid Net Asset Value (NAV) indicate good returns and growth potential. Lastly, a reputable sponsor adds credibility and low execution risk ensuring timely execution and boosting investor confidence.
InvITs allow retail investors to access large infrastructure projects with several benefits: low entry cost, stock exchange listing for liquidity, regular NAV disclosures for transparency, and strong SEBI regulation mandating 90% income distribution and limiting leverage.
What's exciting isn't just the scale - it's the category evolution: Telecom Infrastructure InvITs, like Digital Fibre Infra Trust and Altius Telecom Infrastructure Trust are gaining traction on the back of 5G rollout, cloud migration and growing telecom subscribers base. Renewables InvITs , such as Virescent and Anzen Energy Yield Plus, are helping global capital tap India's green energy transition.
, such as Virescent and Anzen Energy Yield Plus, are helping global capital tap India's green energy transition. Hybrid InvITs now blend toll roads, solar parks, and power lines in a single vehicle -offering diversified real asset exposure with a single cheque.
These are not beta plays on infra development. These are cash-generating assets that already exist and operate, offeringvisibility, durability, and yield-three qualities hard to come by in public markets today.
In fact, some global family offices and pension funds now allocate 10-15% of their India alternatives to InvITs and yield infra platforms. Yet domestic allocations still lag far behind -perhaps not for long.
In a crowded alternatives market, InvITs are no longer just infrastructure finance vehicles - they are real assets with real income potential. As India builds its roads, wires, and towers, InvITs offer investors a chance to not just watch but earn from the country's growth story.
The author, Rajini Vislavath, is the CIO of Alternative Investment at LGT Wealth India.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making investment decisions.