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

Hind Roadways Ltd. sets up an InvIT by settling a trust and transferring road SPVs to it. Which description of Hind Roadways Ltd.'s role is most accurate under the InvIT Regulations?

Hind Roadways Ltd. is the sponsor because it set up the InvIT trust and transferred its road SPVs to it. Settling the trust does not make it the trustee, which must be a separate registered debenture trustee, nor the investment manager or project manager.

  1. AIt is the sponsor, being the person who sets up the InvIT and transfers or proposes to transfer assets to itCorrect
  2. BIt is the trustee, as it settled the trust
  3. CIt is the investment manager, as it owns the road SPVs
  4. DIt is the project manager, as it transferred the assets

Explanation

A sponsor is the person who sets up the InvIT as a trust and transfers or proposes to transfer its equity holdings or assets to it. Settling the trust does not make it the trustee, which must be a separate SEBI-registered debenture trustee independent of the sponsor and manager. Ownership of the SPVs before transfer does not create the investment manager role.

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