With the Reserve Bank of India cutting the repo rate multiple times over.
The past year, bank fixed deposit and corporate bond yields have fallen, leaving investors searching for higher-return options. One such option is infrastructure investment trusts (InvITs), and currently, IndiGrid InvIT offers a yield of over 9%. However, InvITs are different from traditional fixed-income products and require a closer look before investing.
What is an InvIT?
An Infrastructure Investment Trust (InvIT) is a collective investment scheme regulated by SEBI that pools funds to invest in income-generating infrastructure assets. Investors buy units of the InvIT, and the trust distributes income—usually quarterly—from these assets.
InvITs typically invest in:
Power transmission lines
Renewable energy projects (solar, storage)
Roads, mobile towers, data centers, and logistics infrastructure
Some exchange-listed InvITs in India include:
IRB InvIT Fund
IndiGrid InvIT
Powergrid Infrastructure Investment Trust
Units can be traded via your broker, with profits earned from capital gains and distributions.
SEBI regulations for InvITs
At least 80% of funds must be invested in operational, revenue-generating assets
At least 90% of net distributable cash flows must be distributed periodically to investors
About IndiGrid InvIT
IndiGrid InvIT is India’s first and largest publicly listed InvIT, managing assets worth over ₹32,800 crore across transmission lines, renewable generation, and energy storage. It holds a strong AAA credit rating.
Since its IPO in June 2017 at ₹100/unit, the trust has expanded its AUM eightfold, growing distributions per unit (DPU) from ₹11 in FY 2018 to ₹16 in FY 2026. The current unit price is around ₹165, offering investors both capital appreciation and attractive distributions. Over its history, IndiGrid has delivered an annualised return of roughly 13%.
Should you invest?
IndiGrid’s future growth depends on acquiring new infrastructure projects and managing costs effectively. Based on the current unit price and projected DPU of ₹16 for FY 2025-26, the yield exceeds 9%, which is appealing for income-seeking investors.
However, risks remain, including:
Underperformance of assets leading to lower distributions
Rising debt costs
Construction delays
Market volatility affecting unit prices
Investment in IndiGrid InvIT should be based on your risk appetite, portfolio diversification, and consultation with a financial advisor. It can be a good source of steady income, but it should complement, not replace, other asset classes.
Comments are closed.