Strategic Management and Corporate Finance · Infrastructure Investment Trusts

Public vs Private InvITs: Offer, Listing and Unitholders

Updated 11 October 2026 · Fact-checked

A public InvIT raises money through an initial offer to the public, must meet size and minimum subscription conditions, and must list its units on a stock exchange. A private InvIT places units privately with a limited set of investors, and listing is optional. Both are governed by the SEBI InvIT Regulations, 2014.

Understand Public and Private InvITs: Offer, Listing and Unitholders

An Infrastructure Investment Trust (InvIT) pools money from investors and puts it into infrastructure projects such as roads, power transmission and pipelines. Investors hold units. The income from the projects is passed on to them as distributions. Think of it as a mutual-fund-like trust for operating infrastructure assets.

SEBI allows two routes. A public InvIT raises funds by an offer of units to the public. A privately placed InvIT raises funds by placing units with a small group of investors, mostly institutions and large investors. The route decides how much regulation, disclosure and investor protection applies.

A public InvIT is built for retail and wide participation. So SEBI sets conditions on the size of the assets and the offer, on minimum subscription, and on how many people hold the units. If the minimum subscription is not reached, the money goes back to applicants. Units must be listed and traded on a recognised stock exchange, which gives investors an exit.

A private InvIT is meant for informed investors who can handle risk. So it has a high minimum investment per investor, a cap on the number of investors, and lighter offer rules. Listing is not compulsory, but a private InvIT can list if it chooses. If it lists, the listing conditions apply to it.

Unitholders are the owners of the trust's beneficial interest. They do not run the trust. They get distributions (the regulations require at least 90% of the net distributable cash flows to be paid out), receive regular disclosures, and vote on key matters such as related party transactions, change of investment manager and delisting. They vote through unitholder meetings, and interested parties are kept out of voting on matters in which they are interested. The trustee watches over the trust on their behalf.

Key rules to remember

Minimum subscription (public initial offer): Subscribed amount ≥ minimum subscription required by the regulations (as a % of the offer size); A public initial offer must reach the minimum subscription set by the regulations and the offer document. If it is not reached, units cannot be allotted and the application money must be refunded. Use the percentage given in the question or in the latest SEBI text. Do not assume a figure from REIT or other issue rules.
Public InvIT initial offer thresholds: InvIT assets ≥ ₹500 crore; initial offer size ≥ ₹250 crore; These are the size conditions for a public initial offer under the SEBI InvIT Regulations as amended. A public offer also has public holding and investor-spread conditions. State those in words unless the question gives figures.
Distribution rule: Distribution ≥ 90% of net distributable cash flows; Applies to both public and private InvITs. Frequency and detail follow the regulations.
Borrowing limit for a public InvIT: Consolidated borrowings and deferred payments ≤ 70% of value of InvIT assets; Above 25% of asset value, both a credit rating of AAA or equivalent and unitholder approval are required. The overall cap is 70% under the current rules. Check the exact conditions, including the approval threshold, in the latest SEBI text.
Listing difference: Public InvIT: listing mandatory. Private InvIT: listing optional; This is the single most-tested contrast.

How to solve Public and Private InvITs: Offer, Listing and Unitholders questions

Use this order for any question on offer, listing and unitholders. It keeps your answer in the provision, analysis, conclusion format.

1Identify the type of InvIT in the facts: public offer or private placement.
2State the relevant rule in plain words: offer size, asset value, minimum subscription, public holding and investor conditions, listing.
3Apply the numbers in the question. Compute the minimum subscription from the percentage given in the question or offer document, or the percentage asked.
4Check the listing position. Public means mandatory listing. Private means optional.
5Bring in unitholder rights if the facts mention distributions, voting, related parties or exit.
6Write a clear conclusion: allowed or not, refund or allotment, and what the manager or trustee should do.
7Add a practical compliance point, such as disclosure to the exchange, refund timing or unitholder approval.

Quickest way: Two-column contrast plus one calculation

When to use it: Use it when the question says 'distinguish' or 'explain with reference to SEBI InvIT Regulations' and time is short.

Draw two columns: public and private.
Fill rows in this order: how units are offered, size and subscription, investor profile, listing, disclosure level.
Write the one number that matters, such as the minimum subscription percentage given in the question.
Close with one line on unitholder rights, which are common to both.
Finish with a short conclusion tied to the facts.

Common mistakes in Public and Private InvITs: Offer, Listing and Unitholders

Saying all InvITs must be listed
Students remember that InvIT units trade on exchanges.
Fix: Only public InvIT units must be listed. Private InvIT listing is optional.
Applying the minimum subscription percentage to the wrong base
Students take the percentage of the amount collected instead of the offer size.
Fix: Compute the required percentage of the offer size and compare it with the amount actually subscribed.
Mixing up REIT and InvIT rules
The two regulations look alike and have similar structures.
Fix: Name the SEBI InvIT Regulations, 2014 and use infrastructure terms. Check each figure against the InvIT text.
Treating unitholders as managers of the trust
The word 'holder' sounds like control.
Fix: Unitholders have economic rights and voting rights on key matters. The investment manager and trustee run and oversee the trust.
Forgetting that interested parties are kept out of voting
Students recall the voting rule but not the exclusion.
Fix: State that related parties of the matter do not vote on it. Then give the approval requirement.
Quoting old thresholds from memory
SEBI has amended the regulations several times.
Fix: Learn the principle first and write figures as in the latest SEBI text supplied to you.

Worked examples

Example 1

Ganga Highways InvIT plans a public initial offer of units worth ₹600 crore. Assume the offer document requires a minimum subscription of 90% of the offer size (an assumed figure for this example). At closing, applications are valid for ₹520 crore. Can it go ahead with allotment?

Show the solution

Offer size check: ₹600 crore is above the ₹250 crore minimum for a public initial offer, so the offer-size condition is met (assuming the InvIT assets also meet the ₹500 crore threshold).
Rule: a public initial offer needs the minimum subscription stated in the regulations and offer document. Here we assume 90% of the offer size.
Compute 90% of ₹600 crore = 0.90 × 600 = ₹540 crore.
Compare: subscribed amount is ₹520 crore, which is less than ₹540 crore.
So the minimum subscription condition is not met.

Answer: No. On the assumed 90% condition, the offer needs at least ₹540 crore. With ₹520 crore, it cannot allot units and must refund application money as the regulations require.

Example 2

Distinguish a public InvIT from a privately placed InvIT with reference to offer, listing and investors. Then state what unitholders of both can expect.

Show the solution

Offer: a public InvIT invites the public through an initial offer with an offer document. A private InvIT places units privately with eligible investors.
Conditions: a public InvIT must meet asset-value, offer-size and minimum subscription conditions. A private InvIT has a high minimum investment per investor and a cap on the number of investors.
Listing: public units must be listed on a recognised stock exchange. Private InvIT listing is optional.
Disclosure: a public InvIT has wider disclosures because retail investors take part. A private InvIT has lighter requirements.
Unitholders in both: right to distributions of at least 90% of net distributable cash flows, right to disclosures, and voting on key matters such as related party transactions, with interested parties not voting.

Answer: A public InvIT raises funds from the public, meets stricter offer conditions and must list. A private InvIT raises funds from a limited set of investors and may or may not list. Unitholder rights to distributions, information and voting apply in both.

Exam tips

Always lead a 'distinguish' answer with the listing contrast. It is the clearest difference.
Show the minimum subscription calculation in one line. Examiners look for the base (offer size) and the result.
Write figures as in the latest SEBI text. For a public offer, remember InvIT assets of at least ₹500 crore and an initial offer size of at least ₹250 crore. If you are unsure of an amended number, state the rule in words and give the number you know.
Bring in the trustee and investment manager when you discuss unitholder rights. It shows you understand who protects whom.
Use case-style structure: rule, facts, conclusion, then one compliance step such as refund or exchange disclosure.

Practice questions from Infrastructure Investment Trusts

Public and Private InvITs: Offer, Listing and Unitholders: frequently asked questions

What is the main difference between a public and a private InvIT?

A public InvIT raises money from the public and must list its units. A private InvIT places units with a limited set of investors and listing is optional. Public InvITs face stricter offer and disclosure conditions.

What is the minimum subscription for an InvIT initial offer?

A public initial offer must receive the minimum subscription set by the SEBI InvIT Regulations and the offer document. If it is not reached, units cannot be allotted and the application money is refunded to applicants. Use the percentage given in the question or in the latest SEBI text. The offer must also meet the offer-size and asset conditions for a public offer.

Must InvIT units be listed?

Units of a public InvIT must be listed on a recognised stock exchange. A private InvIT may choose to list, but it is not compulsory.

What rights do unitholders have in an InvIT?

They receive distributions, with at least 90% of net distributable cash flows paid out. They get periodic disclosures and vote on important matters such as related party transactions, change of investment manager and delisting. They do not manage the trust day to day.

How are InvIT units issued?

A public InvIT issues units through an initial offer with an offer document, followed by allotment and listing. A private InvIT issues units by private placement to eligible investors.