SEBI Proposes Easier InvIT Rules on SPVs and Greenfield Projects

SEBI Consultation Paper Dated 05.02.2026

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing a series of ease-of-doing-business (EoDB) measures for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

The proposals aim to provide greater operational flexibility, improve capital efficiency, and support long-term infrastructure and real estate development while maintaining investor protection.

1. Retention of SPVs by InvITs After Concession Expiry

SEBI has proposed allowing InvITs to retain Special Purpose Vehicles (SPVs) even after the expiry of concession agreements, subject to:

Adequate disclosures to investors
A time-bound exit mechanism for such SPVs

This proposal seeks to address practical challenges faced during concession closures and facilitate orderly exits without disrupting trust operations.

2. Expanded Investment in Liquid Mutual Funds

It has been proposed to:

Allow REITs and InvITs to expand their investments in liquid mutual fund schemes
Subject to the condition that such schemes have a Credit Risk Value (CRV) of 10 or higher

This measure is intended to enhance treasury management flexibility while ensuring prudent risk standards.

3. Investment by Private InvITs in Greenfield Projects

SEBI has proposed permitting private InvITs to:

Invest up to 10% of their asset value in greenfield infrastructure projects

This change aims to:

Encourage early-stage infrastructure development
Enable capital formation in new projects while limiting exposure to developmental risks

4. Widening the Permissible Use of Higher Borrowings

Under the current framework, borrowings beyond 49% of asset value are subject to strict end-use restrictions. SEBI has proposed to widen the permissible use of such borrowings to include:

Refinancing of existing debt
Capital expenditure (capex)
Capacity augmentation
Major maintenance expenditure, including for road assets

This proposal is expected to improve financial flexibility and asset sustainability for InvITs and REITs.

5. Objective of the Proposals

The consultation paper seeks to:

Reduce operational and regulatory friction
Align regulatory norms with market realities
Strengthen the REIT and InvIT ecosystem
Support infrastructure growth while safeguarding investor interests

6. Invitation for Public Comments

Considering the potential impact on trusts, sponsors, investment managers, lenders, and investors, SEBI has invited public comments and suggestions on the proposed measures.

Stakeholder feedback will be taken into account before finalising the regulatory framework.