4 Indian InvITs That Can Deliver Better Income Than Bank FDs

Synopsis: The article states how InvITs can be a go-to alternative for passive investors that delivers returns up to 15 percent, better than your FDs and savings account returns.

InvITs, or Infrastructure Investment Trusts, are SEBI-regulated investment vehicles in India that pool funds from investors to own and operate income-generating infrastructure assets like toll roads, power transmission lines, and pipelines.

InvITs function like mutual funds but focus on infrastructure, with units listed on stock exchanges for trading. They must distribute at least 90 percent of net distributable cash flows to unitholders quarterly, providing steady income similar to dividends.​ Sponsors (infrastructure firms) transfer assets to the trust via special purpose vehicles (SPVs), enabling developers to monetize completed projects and recycle capital for new ones.

Powergrid Infra InviTs 

PGInvIT is India’s first Infrastructure Investment Trust from a Maharatna CPSE, set up by POWERGRID, the country’s largest power transmission player. The Trust’s vision is to achieve a focused business model with high operational efficiency to enhance returns for its investors. Its initial portfolio consists of five fully operational power transmission projects that earn fixed tariffs under long-term agreements, ensuring high availability.

The trust invests in the Power industry and has a market capitalization of Rs. 8,157 crore. The trust’s shares today made a day high of Rs. 89.95, up by 0.52 percent from its previous day’s close price of Rs. 89.65 per share. The trust has given a capital return of 4.68 percent over the last 1 year.

The trust has given a dividend of Rs 12  per unit, and it has a 13.39 percent dividend yield, in this financial year. The company trades at a PB of 1.07 and a ROE of 15.4 percent, representing fair value with stable distribution.

IRB InvIT Fund

Established in 2017 to provide a platform for investing in toll-generating road infrastructure assets. The Trust aims to democratize the ownership of road assets for investors and intends to review and enhance its portfolio to drive more value creation. The Trust’s main business involves managing a solid and geographically diversified portfolio of seven toll-generating road assets under agreements with the National Highways Authority of India.

The trust invests in the Service industry and has a market capitalization of Rs 4,886 crore. The trust’s shares today made a day high of Rs. 61.9, up by 1.04 percent from its previous day’s close price of Rs. 61.26 per share. The trust has given a capital return of almost 2.56  percent over the last 1 year.

The trust has given a dividend of Rs 7.5  per unit, and it has a 13.09 percent dividend yield, in this financial year. The company trades at a PB of 0.69 and ROE of 8.75 percent, indicating that the market is cautious with high leverage of the trust.

Energy Infrastructure Trust

India Infrastructure Trust (the Trust) is an India-based infrastructure investment trust. The Trust’s investment objectives are to carry out the activities of an infrastructure investment trust by initially acquiring the initial portfolio asset in the first instance, and to make investments. The initial portfolio asset of the Trust is a pipeline system used for the transport of natural gas (Pipeline).

The trust invests in the Service industry and has a market capitalization of Rs 5,837 crore. The trust’s shares today made a day high of Rs. 87.95, flat from its previous day’s close price of Rs. 87.9 per share. The trust has given a capital negative return of almost 1.73  percent over the last 1 year.

The trust has given a dividend of Rs 15.1 per unit, and it has a 13.7 percent dividend yield, in this financial year. The company trades at a PB of 6.45 and ROE of 0.46 percent, indicating that the market is cautious with high leverage of the trust.

Capital Infra Trust

Capital Infra Trust (erstwhile National Infrastructure Trust) is an InvIT which priorities strategic investments in Infrastructure projects mainly national highways. These projects bridge geographical gaps, fostering economic activity and unlocking the potential of underserved regions.

The trust invests in the construction industry and has a market capitalization of Rs 2,094 crore. The trust’s shares today made a day high of Rs. 74.40, up by 0.8 percent from its previous day’s close price of Rs. 73.78 per share. The trust has given a capital negative return of 25.27 percent over the last 1 year.

The trust has given a dividend of Rs 30.75 per unit, and it has a 9.26 percent dividend yield, in this financial year. The company trades at a PB of 1.07, indicating that the market is cautious with high leverage of the trust.

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