The central board of retirement body Employees’ Provident Fund Organisation or EPFO is all set to meet on November 16. According to reports, the members are likely to discuss on investing a part of of its annual deposits in infrastructure investment trusts (InvITs). If the deal is sealed, these InvITs are capable of boosting investments in infrastructure. The move may also expand the scope of EPFO’s investment basket beyond exchange-traded funds (ETFs), government securities and bonds, as per media reports. InvITs enables individuals and investors to invest their money directly in infrastructure projects to earn a small part of the income as return.
“The CBT (central board of trustees) is meeting on November 16 after almost eight months. Among other issues, investment in InvITs is likely to be taken up for discussion,” a government official, who requested anonymity, told news website MoneyControl.
“Investing in Alternative Investment Funds (AIFs) was allowed earlier this year as a matter of rule. But the notification came after the last EPFO board meet in March. It’s logical that the issue is put on the table for the central board to discuss,” an EPFO board member, who also did not want to be name, told the website.
“EPFO’s corpus is growing and there is need to diversify investments. And, there is a demand for long-term funds in the larger infrastructure space. Both the points complement each other and so a discussion on its acceptance as an investment vehicle for EPFO will be crucial,” said the unnamed government official quoted above.
Over the past few months, retirement body EPFO has been collecting deposits between Rs 15,000 crore and Rs 16,000 crore each month. This means that in FY22, the annual deposits at EPFO will be between Rs 1.8 lakh crore to Rs 1.9 lakh crore. The organisation can invest up to 15 per cent of the annual accruals in equities, while the rest of it can be invested in debt instruments.
The agendas of the CBT, according to Moneycontrol, and the members of the investment committee are likely to meet before the November 16 CBT meeting.
“The CBT meeting circular has been issued and all stakeholders has been informed about the meet. The agendas will be finalised soon and shared with all the board members,” said the official of the government.
According to NSE, “InvIT is designed as a tiered structure with Sponsor setting up the InvIT which in turn invests into the eligible infrastructure projects either directly or via special purpose vehicles (SPVs).”
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