Topics Covered: Investment models.
Infrastructure Investment Trust (InvIT) model:
Why in News?
Cabinet approves asset monetization of subsidiaries of Power Grid Corporation of India limited through infrastructure investment trust.
- This is the first time any PSU in Power Sector will undertake asset recycling by monetising its assets through the InvIT model and using the proceeds to fund the new and under-construction capital projects.
What is InvIT model?
It is a Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.
- The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014.
About Powergrid:
- It is a public limited company under the administrative control of the Ministry of Power, Government of India.
- It started its commercial operation in the year 1992-93 and is today, a Maharatna company, engaged in the business of power transmission.
InstaLinks:
Prelims Link:
- What is a Maharatna Company? What are the benefits available for such companies?
- Criteria for grant of Miniratna status and Navaratna Statuses?
- About Powergrid.
- What is InvIT model?
Mains Link:
Write a note on Infrastructure Investment Trusts (Inv-IT).
Sources: PIB.
