Investment funds, for example, still have to invest heavily in InvIT. Asset managers expect the trend to change in the future. There is a clear advantage for a private InvIT, as the valuation is established after a mature discussion with a selected group of investors who, in addition to raising long-term capital, offer strategic contributions,
Although the private route allows lower disclosures, industry experts add that there are greater benefits
More than two years after its introduction and with three of these trusts, recent corporate actions suggest that the private route is preferable to the public price.
Reliance Industries Digital Fiber Infrastructure Trust and Torre Infrastructure Trust; India Infrastructure Trust, sponsored by Brookfield, an InvIT, guided by Eastern structural engineers, are four similar tools at various stages of formalization. The three investors are expected to find through the private route.
While the private route allows for lower disclosures, industry experts added that there were greater benefits. "There is a clear advantage for a private InvIT, as the valuation is established after a mature discussion with a selected group of investors who, in addition to raising long-term capital, offer strategic contributions," said Shubham Jain, group leader, and vice president. President of Icra Ratings.
There are two publicly traded InvITs: Sterlite Power's India Grid Trust and the IRB InvIT fund of IRB Infrastructure Developers. The third InvIT, poor IDPLs in Larsen and Toubro IndInfravit, is privately owned. "The returns of L&T InvIT have been higher than those declared," said a source with knowledge of InvIT's performance.
When presented, industry experts set the fundraising potential of the instruments at $ 5-7 billion. However, both companies and investors take time to heat a relatively new instrument. Investment funds, for example, still have to invest heavily in InvIT. Asset managers expect the trend to change in the future.
“Given the type of return offered by publicly traded companies, it is surprising that investment funds so far have moved away from the InvIT. For an institutional investor, it doesn't matter much if it is a private person or a listed person. The important thing is the reputation of the sponsor, ”said Nipun Mehta, founder, and CEO of BlueOcean Capital Advisors.
According to Value Research, three investment funds combined less than Rs 50 crore in India Grid and 10 funds have Rs 444.82 crore in the IRB InvIT fund, of which only two funds invested more than Rs 100 crore.
“Funds such as L&T and proposed funds such as Reliance Industries and Brookfield will offer a sponsor reputation. I hope that investment funds see InvITs with a better reputation as a promoter, "Mehta added.
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