CS Professional · Strategic Management and Corporate Finance · Infrastructure Investment Trusts
An InvIT's net distributable cash flows (NDCF) for a year are ₹80 crore. Under the SEBI InvIT Regulations, which is the minimum amount it must distribute to unitholders for that year?
The minimum is ₹72 crore, which is 90% of the ₹80 crore NDCF. The regulations require an InvIT to distribute at least 90% of its net distributable cash flows to unitholders. It is not required to pay out the full amount.
- A₹72 croreCorrect
- B₹80 crore
- C₹56 crore
- D₹40 crore
Explanation
An InvIT must distribute not less than 90% of its NDCF to unitholders. 90% × ₹80 crore = ₹72 crore. ₹56 crore applies 70%, and ₹40 crore applies 50%. Neither is the prescribed floor, and the regulation does not require 100% distribution.
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