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Five real estate investment trusts and 23 infrastructure investment trusts (InvITs) have mopped up Rs 1.5 lakh crore in the past five years, taking their collected assets under management to Rs 8.7 lakh crore, SEBI Chairman Tuhin Kanta Pandey said on Thursday. Pandey was speaking at the National Bank for Financing Infrastructure and Development (NaBFID) conclave organised in Mumbai. 

REITs and InvITs are the most promising avenues for infrastructure and real estate investments, he said, stressing that both sectors have delivered significant returns in the past. 

Highlighting the strong share of infrastructure companies in the country's listed space, Pandey said that companies with market capitalisations of Rs 50,000 crore and above account for a fifth of the total market value on Dalal Street. 

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He said that mutual and pension funds should allocate investments to infrastructure securities. 

Pandey also said that the market regulator has been involved actively in increasing the reach of municipal bonds in the country. 

Here are answers to a few frequently asked questions (FAQs) related to the terms and concepts mentioned in this story. 

What are REITs and InvITs? 

Introduced on Dalal Street in 2014, both are structured investment trusts that facilitate investor participation in real estate and infrastructure projects without owning physical assets directly and wholly.

What do they let retail investors do?

These hybrid instruments enable retail and institutional investors to earn income from commercial real estate and infrastructure projects. SEBI has decided to reclassify REITs as equity instruments while maintaining a status quo on InvITs. 

What do these trusts do?

These trusts pool funds from investors to own and operate income-generating realty and infra properties -- such as offices, shopping malls and residential complexes -- to enable investors to earn regular income primarily generated from rental or lease payments.

Is there any minimum payout that these trusts are required to pay?

Yes, both REITs and InvITs are mandated by law to pay at least 90 per cent of their taxable income to investors as distribution income. These payouts work like dividends.

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