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CS Professional · Strategic Management and Corporate Finance · Infrastructure Investment Trusts

An Infrastructure Investment Trust (InvIT) in India is best described as an instrument that:

An InvIT is a trust that pools money from investors and invests it in infrastructure projects, passing on the cash flows from those assets as returns. It is a collective investment vehicle, not a lender, an exchange or a government department.

  1. APools money from investors and invests it in infrastructure projects, giving investors returns from the cash flows of those projectsCorrect
  2. BLends only short-term working capital to infrastructure contractors
  3. CActs as a stock exchange for trading infrastructure bonds
  4. DIs a government department that funds roads from budget allocations

Explanation

An InvIT works like a mutual fund for infrastructure. It collects funds from investors, holds infrastructure assets directly or through SPVs, and distributes the cash flows generated. The other options describe functions unrelated to an InvIT.

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