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

Which of the following is a typical feature that makes InvIT units attractive to investors seeking steady income?

InvIT units attract income-seeking investors because the trust regularly distributes cash flows from operating infrastructure assets. Returns are not guaranteed by the Government, unit holders do not run projects, and SEBI regulates InvITs. So regular distribution of cash flows is the correct answer.

  1. ARegular distribution of cash flows generated by operating infrastructure assetsCorrect
  2. BGuaranteed capital appreciation fixed by the Government
  3. CVoting control over the day-to-day running of each project
  4. DFreedom from any regulation by SEBI

Explanation

InvITs are structured to distribute most of the net distributable cash flows to unit holders regularly, which suits income-seeking investors. Returns are not guaranteed by the Government, unit holders do not manage projects, and InvITs are regulated by SEBI.

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