As infrastructure takes center-stage in the Indian growth story, InvITs are increasingly seen as tax optimized monetization vehicles. InvITs, once introduced as a bond proxies, are now no longer mere annuity products. Private listed and unlisted InvITs, driven by their ability to invest in developmental assets and governed by a lighter set of regulations are drawing keen interest from institutional investors.

Unlisted InvITs, armed with the same tax incentives as a listed InvIT, emerged as the clear favorites – until recently when the SEBI required unlisted InvITs to have a diversified set of unitholders and a public float. A public float for unlisted InvITs was not quite as expected, and the perception that unlisted InvITs are no longer the favorite seemed to prevail. Sponsors moved away from unlisted InvITs to private listed InvITs to be safe, yet curiously asking – whats the right way to go?

We discuss the regulatory approach to InvITs as we have seen them evolve over the years, and seen the bell-curve of unlisted InvITs – from being the poster-boys of the Indian infrastructure story to now perceived rejects.