Explanation:

Often, infrastructure projects such as roads or highways take some time to generate steady cash flows. Meanwhile, the infrastructure company has to pay interest to banks for the loans taken by it. An InvIT essentially gives the company the leeway to fulfil its debt obligations quickly. InvITs are mutual fund like institutions that enable investments into the infrastructure sector by pooling small sums of money from multitude of individual investors for directly investing in infrastructure so as to return a portion of the income (after deducting expenditures) to unit holders of InvITs, who pooled in the money. InvITs are set up as a trust and registered with SEBI. Since the minimum investment amount in an IPO is Rs 10 lakh, InvITs are suitable for high networth individuals, institutional and non-institutional investors like pension funds, foreign portfolio investors, mutual funds, banks and insurance firms. InvITs are listed on exchanges just like stocks — through IPOs.