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India's markets regulator is considering measures to broaden investment flexibility for Real Estate Investment Trusts and Infrastructure Investment Trusts. The regulator's chairperson shared that SEBI is reviewing a proposal to widen the pool of liquid mutual fund schemes available to these trusts while ensuring investor protection. The regulator is also working with other financial bodies to encourage greater institutional participation. Plans to include REITs in market indices and examine whether private InvITs may invest in greenfield projects are part of the ongoing discussions aimed at strengthening the ecosystem for these investment vehicles.
India's markets regulator is reviewing ways to expand investment avenues for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The chairperson of the Securities and Exchange Board of India (SEBI) conveyed through a speech uploaded on the regulator's website that the authority is assessing a proposal to widen the range of liquid mutual fund schemes these trusts may invest in. The intent is to offer more flexibility while ensuring that investor interests remain protected. Advertisement
The regulator also plans to support the inclusion of REITs in market indices. This move is expected to improve visibility for the asset class and create long-term benefits for institutional and retail investors. Similar suggestions have been discussed in earlier regulatory interactions, reflecting SEBI's ongoing push to deepen India's alternative investment market.
The latest developments follow SEBI's proposal made a few months ago to permit foreign investors and qualified institutional buyers to participate as strategic investors in these trusts. That proposal aimed to increase capital inflows and broaden the participation base for REITs and InvITs, both of which play an important role in India's real estate and infrastructure financing.
SEBI is coordinating with the Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority and Employees' Provident Fund Organisation to streamline the proposed changes. Joint efforts with these institutions indicate a broader attempt to align investment frameworks across major financial sectors.
The chairperson also noted that the regulator is examining whether private InvITs may invest in greenfield assets subject to adequate safeguards. Such an allowance would mark a shift from the current structure, where private InvITs primarily focus on operational assets. The exploration of this change signals an effort to support more early-stage infrastructure development pathways.
Source Reuters
5th Jun, 2025
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