Infra players make a beeline for InvITs

The surging economic activities in the country has encouraged infra and construction sector players to seek Sebi's clearance for fund generation and in a recent move, the regulator has finally granted three companies - IRB Infrastructure, GMR, and MEP Infrastructure, to launch the trusts. These companies will float IRB Invits Fund shortly, and Sebi is likely to relax norms further for the real estate investment trusts (REITs) and InvITs, with a view to help infra developers mop-up funds for long-term projects in a more transparent manner. But the move failed to get enough attention of businesses owing to taxation issues. The Sebi board is expected to allow REITs and InvITs to have upto five sponsors, as against the present provision of only three. Under the proposal for InvITs, Sebi may allow such trusts to invest in two-level SPV (Special Purpose Vehicle). The regulator plans to remove the restriction on the SPV to invest in other SPVs, thus allowing InvIT to invest in a holding company which subsequently holds stake in SPVs, said official sources.